Since the late 1990s, the broker-dealer community has been transitioning away from traditional commission-based accounts and toward fee-based alternatives. Facilitated first by a proposed 1999 exemption under Rule 202 that would allow broker-dealers to offer fee-based accounts without being registered as investment advisers — and then transitioning fully to dual-registered or hybrid RIA arrangements after the proposal was struck down in 2007 — the shift has been substantial, with leading broker-dealers going from less than 10% of fee-based revenue to more than 50% today.

Given regulatory winds around the globe have been blowing increasingly toward no-commission fiduciary advice, the shift is looking permanent. That’s not to say it’s for everyone — or for every client.

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