What is a key difference in how fee-based advisors and brokers are compensated?
Huge Conflicts for Dual Advisers: Northeastern's Boyson.

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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Fee-based advisors charge a flat fee, while brokers charge hourly.
Fee-based advisors are paid a percentage of assets, while brokers earn transaction-based commissions.
Fee-based advisors earn commissions on sales, while brokers charge a percentage of assets.
Fee-based advisors and brokers both charge a flat fee.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What regulatory change in 2007 influenced brokers to become fee-based advisors?
Brokers charging asset-based fees had to move clients to fiduciary accounts.
Brokers were allowed to charge higher commissions.
Brokers were banned from selling mutual funds.
Brokers were required to disclose all fees to clients.
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Why are passive funds appealing to fee-based advisors?
They are easier to sell to clients.
They offer higher commissions.
They are more tax-advantaged and cost-effective.
They require less regulatory compliance.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is a dual-registered advisor?
An advisor who charges both flat fees and commissions.
An advisor who only sells mutual funds.
An advisor who is both a broker and a fiduciary.
An advisor who works for two different firms.
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What concern did the SEC have about dual-registered advisors?
They were not selling enough insurance products.
They were not disclosing cheaper mutual fund options.
They were not registered with the SEC.
They were charging too low fees.
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How did the shift to passive funds affect active mutual funds?
Active funds saw a complete outflow of investments.
Active funds maintained their market share.
Active funds experienced outflows but retained some investments through institutional classes.
Active funds increased their fees to compete.
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What combination of factors contributed to the shift towards passive funds?
Advisor interest in passive funds and the financial crisis.
Increased marketing and advertising of passive funds.
Higher fees and increased regulation.
Lack of investor interest and poor performance of active funds.
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