If you read the press releases sent out by FINRA and the Financial Services Institute, you'd believe that dually registered advisors are tightly regulated while independent RIAs operate in a loosey-goosey regulatory environment that is dangerous to individual investors. According to this view, FINRA's risk-based inspection program has an examiner in the broker-dealer's home office every two years or so, on average, and sometimes every four years - while rogue RIA firms host an SEC examiner once every eight to 10 years. The only reason these RIA firms have given up commissions, the argument continues, is so they can evade regulatory supervision of their dark and dangerous activities.
It's true that advisors who gave up commission revenues are woefully undersupervised when it comes to their sales activities - although perhaps (I'm speculating here) that's because they aren't actually engaged in any sales activities. It's also possible that the SEC has, over the years, recognized that independent RIAs who are mostly allocating funds for clients don't pose a grave public threat.
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