In a survey report prepared by the RAND Corporation and made available by the SEC Office of the Investor Advocate, survey respondents expressed generally positive views of the SEC's proposed rulemaking known as the Customer Relationship Summary ("CRS"). The proposal was designed to improve the quality and transparency of investors' relationships with investment advisers ("IAs") and broker-dealers ("BDs").
As previously covered, the SEC proposal would require BDs and IAs to provide retail investors with a short-form "relationship summary" detailing (i) certain information related to services offered, including the legal standard that applies to each type, (ii) associated fees and (iii) conflicts of interest.
The report consisted of a nationwide survey (conducted through its nationally representative American Life Panel) and qualitative interviews of investors (conducted using independent market research firms) to seek comments on a sample CRS.
The report concluded that, overall, survey respondents positively assessed both the format and content of the sample CRS. The think tank found that:
- nearly 90 percent of survey respondents indicated that the sample CRS would aid them in making informed decisions about investment accounts and services;
- over 75 percent of respondents agreed with various statements characterizing the sample CRS as useful in terms of understanding key terms and conflicts of interest, and providing a framework for conversations with investment professionals;
- 85 percent of respondents believed the "side-by-side comparisons" would be useful in deciding between a BD and an IA;
- the majority of respondents felt that the CRS was too long;
- interview participants found the "Fees and Costs" section to be important but "overwhelming," due in part to the complexity of the language; and
- after "Fees and Costs," the "Relationships and Services" and "Our Obligations to You" sections were the second and third most likely to be selected as "informative sections," respectively.
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