Registered Representatives of Independent Broker-Dealers are Properly Classified as Independent Contractors


From the Financial Services Institute —

The independent broker-dealer (IBD) business model focuses on offering financial solutions to the “main street” clients that form the backbone of America’s investor class. Financial advisors associated with BDs  provide those families with the critical financial advice they need to prepare for the future and maximize their ability to achieve their financial goals. The IBD industry is a network of financial advisors who own their own business, provide their own start-up capital, experience profits and loss based on their own business success, service their clients beyond mere securities transactions, dictate their own business practices, pay their own operating expenses, have complete flexibility on personnel issues, and report their compensation on Internal Revenue Service (IRS) Form 1099. Taken together, the aforementioned indices of independence clearly illustrate that these financial advisors are independent of their IBDs. Further, the idea that financial advisors affiliated with IBDs are properly classified as independent contractors has been vindicated both through Congressional and judicial action.

Read the full story at Financial Services Institute – Independent Contractor Issue Briefing 




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