Brokers' role as stock order router should be reviewed, SEC's Stein Says

Disclosure would help investors know whether broker is serving their best interest.
FEB 21, 2014
Investors should be given more information about where brokers send a stock order to be filled and whether that decision yielded the best price, a member of the Securities and Exchange Commission said Thursday. Additional disclosure would help investors know whether their broker is serving their best interest or routing orders to avoid fees or capture rebates, Commissioner Kara M. Stein said at a Washington conference sponsored by the Council of Institutional Investors. The SEC is weighing such a plan as part of a review of how stocks are traded, according to three people familiar with the matter. (Don't miss: SEC eyes new stock trade disclosure requirements) The SEC is facing pressure to overhaul trading rules after Michael Lewis's “Flash Boys” book alleged that high-frequency traders benefited from exchange rules to take advantage of slower investors. The book also lays blame on the SEC for its set of 2007 rules that resulted in fast traders gaining an edge over slower ones and equity markets becoming more complex and interconnected. “We need to be reexamining order-routing practices and we need to be empowering you with information to examine them yourselves,” Stein said. “Meaningful, usable data can help us answer many of these questions.” (Bloomberg News)

Latest News

Progress runs on AI. Purpose runs on people
Progress runs on AI. Purpose runs on people

When advisors have tech to handle meeting prep and organization, it frees up time they can reinvest more thoughtfully into helping clients.

Advisor moves: Wells Fargo FiNet lands $580M Ameriprise team
Advisor moves: Wells Fargo FiNet lands $580M Ameriprise team

LPL Financial and Raymond James also add independent advisors from Osaic and Edward Jones in Michigan and Arizona.

M1 Advisor bets AI can serve clients wealth managers turn away
M1 Advisor bets AI can serve clients wealth managers turn away

The SEC-registered RIA advises on more than $1 billion in client assets, with no advisory fee through 2027 and no human financial advisors.

SEC charges Caris Investment Partners in alleged cherry-picking scheme
SEC charges Caris Investment Partners in alleged cherry-picking scheme

95.8% of house trades were winners. For clients? The SEC says just 14.9%.

Pension fund accuses Duolingo of burying user-growth crisis
Pension fund accuses Duolingo of burying user-growth crisis

The complaint says Duolingo added friction on purpose, then lied about it.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor