Matthew Ricci

Publication Date


Document Type


First Advisor

Norton, Curtis L.

Degree Name

B.S. (Bachelor of Science)

Legacy Department

Department of Accountancy


Within the brokerage industry, hidden potential conflicts of interest between brokerage firms and investors exist concerning brokerage remuneration. Usually unknown to the investor, the brokerage agent has incentives, other than the standard commission, to sell a certain fund family. The purpose of this project will be to examine the different types of hidden conflicts of interest most prominent in the brokerage industry. The paper will examine basic conflicts of interest inherent to the industry and more fully discuss the problems related to conflicts that are hidden to investors. Recent rules and requirements passed by regulators of the industry will by evaluated and the their effectiveness discussed. The paper will recommend actions and policies that would help to resolve the controversy. Recent news articles, statements, and company announcements were reviewed and analyzed. It was found that current regulations were not strict enough to properly protect investors' interests. Current rules must be clearer concerning shelf-space payments and brokerage firms must make more disclosure to investors concerning possible conflicts of interest.


16 pages




Northern Illinois University

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