Investor Testing of the Proposed Relationship Summary for Investment Advisers and Broker-Dealers
The SEC’s Office of the Investor Advocate released a RAND Corporation report on investor understanding of a proposed Relationship Summary to improve transparency between investors and financial professionals, with no fraud, charges, or financial penalties involved, and public comments were invited by December 7, 2018, to inform final rulemaking.
The SEC’s Office of the Investor Advocate published a report by the RAND Corporation evaluating investor comprehension of a proposed Relationship Summary designed to clarify the distinctions between investment advisers and broker-dealers. The study included a nationwide survey of over 1,800 individuals and qualitative interviews in Denver and Pittsburgh, finding that many retail investors lacked awareness of key aspects of their financial relationships. No fraud, misconduct, or financial penalties are alleged; the report serves solely to support regulatory transparency efforts under SEC comment files S7-08-18, S7-09-18, and S7-07-18, with public feedback due by December 7, 2018.
The SEC’s Office of the Investor Advocate released a report by the RAND Corporation analyzing investor understanding of a proposed Relationship Summary intended to enhance transparency in the relationships between retail investors and their financial professionals. The study involved a nationwide online survey of more than 1,800 participants and qualitative in-depth interviews conducted in Denver and Pittsburgh to assess clarity and effectiveness. SEC Chairman Jay Clayton emphasized that many retail investors were unaware of material aspects of their relationships with investment advisers and broker-dealers, underscoring the need for clearer disclosures. The report found no evidence of fraud, misconduct, or financial harm, and was not part of any enforcement action. Instead, it was designed to inform the SEC’s rulemaking process under File Nos. S7-08-18, S7-09-18, and S7-07-18. The SEC encouraged public comment on the findings and supplemental materials by December 7, 2018, to help shape the final version of the Relationship Summary. The initiative’s goal is to empower investors with standardized, easy-to-understand information to make better-informed decisions when selecting financial professionals.
Exhibits & Attached Documents (1)
Extracted insights
- person investor testing
- company rand corporation
- company report on investor testing conducted by the rand corporation
- agency sec chairman jay clayton
- agency sec's office of the investor advocate
- agency sec staff
- Sec's Office Of The Investor Advocate made available report on investor testing conducted by the Rand Corporation
- Rand Corporation conducted investor testing
- Investor Testing gathered feedback on sample Relationship Summary issued in April 2018
- Sec Chairman Jay Clayton said too many retail investors are not aware of the material aspects of their relationships with their investment professionals
- Sec Staff is reviewing Rand Corporation's investor testing report
- Rand Corporation's Investor Testing consisted of nationwide online survey of over 1,800 individuals
- Rand Corporation's Investor Testing consisted of qualitative in-depth interviews conducted in Denver and Pittsburgh
- Office Of Investor Advocate is making available report to allow the public to consider and comment
- Comments may be submitted to Comment File Nos. S7-08-18, S7-09-18, and S7-07-18
- Comments are encouraged by Dec. 7, 2018
In connection with our ongoing efforts to help address investor confusion about the nature of their relationships with investment advisers and broker-dealers, the SEC’s Office of the Investor Advocate today made available a report on investor testing conducted by the RAND Corporation. The investor testing gathered feedback on a sample Relationship Summary issued in April 2018 as part of a package of proposed rulemakings and interpretations designed to enhance the quality and transparency of investors’ relationships with investment advisers and broker-dealers. The report is available for review and comment on the SEC’s website. “Based on my discussions with many retail investors over the last several months, it is clear to me that too many retail investors are not aware of the material aspects of their relationships with their investment professionals,” said SEC Chairman Jay Clayton. “The results of RAND Corporation’s investor testing support our efforts to provide retail investors with a clear and concise Relationship Summary to help them make important decisions about choosing to work with an investment professional. The SEC staff is carefully reviewing RAND Corporation’s investor testing report as well as other information related to the proposed Relationship Summary that is available in the comment file.” RAND Corporation’s investor testing of the Relationship Summary consisted of: A nationwide online survey of over 1,800 individuals fielded through RAND’s nationally representative American Life Panel Qualitative in-depth interviews conducted in Denver and Pittsburgh fielded using independent market research firms This report may be informative to those evaluating the proposed Relationship Summary. This report may supplement other information considered in connection with the final rule, and the Office of Investor Advocate is making this report available to allow the public to consider and comment on this supplemental information. Comments on this supplemental information may be submitted to comment File Nos. S7-08-18, S7-09-18, and S7-07-18 and are encouraged by Dec. 7, 2018.
In connection with our ongoing efforts to help address investor confusion about the nature of their relationships with investment advisers and broker-dealers, the SEC’s Office of the Investor Advocate today made available a report on investor testing conducted by the RAND Corporation. The investor testing gathered feedback on a sample Relationship Summary issued in April 2018 as part of a package of proposed rulemakings and interpretations designed to enhance the quality and transparency of investors’ relationships with investment advisers and broker-dealers. The report is available for review and comment on the SEC’s website. “Based on my discussions with many retail investors over the last several months, it is clear to me that too many retail investors are not aware of the material aspects of their relationships with their investment professionals,” said SEC Chairman Jay Clayton. “The results of RAND Corporation’s investor testing support our efforts to provide retail investors with a clear and concise Relationship Summary to help them make important decisions about choosing to work with an investment professional. The SEC staff is carefully reviewing RAND Corporation’s investor testing report as well as other information related to the proposed Relationship Summary that is available in the comment file.” RAND Corporation’s investor testing of the Relationship Summary consisted of: A nationwide online survey of over 1,800 individuals fielded through RAND’s nationally representative American Life Panel Qualitative in-depth interviews conducted in Denver and Pittsburgh fielded using independent market research firms This report may be informative to those evaluating the proposed Relationship Summary. This report may supplement other information considered in connection with the final rule, and the Office of Investor Advocate is making this report available to allow the public to consider and comment on this supplemental information. Comments on this supplemental information may be submitted to comment File Nos. S7-08-18, S7-09-18, and S7-07-18 and are encouraged by Dec. 7, 2018.