Boston, September 30, 2010 – A new report from Aite Group examines the potential impact of financial reform (i.e. Dodd-Frank) on the retail brokerage and proprietary trading communities. It also drills down into likely changes under FinReg and discusses how these changes will likely affect each of these communities.

The implementation of financial regulation as defined by the Dodd-Frank Act will have far-reaching implications for all facets of the financial services industry. Retail brokers will be affected by the creation of a new fiduciary standard, a Consumer Financial Protection Agency (CFPA), and new disclosure requirements. The impact on this group will be felt over time, as the SEC must conduct feasibility studies, gradually shaping final rules prior to implementation. Meanwhile, a subsection of FinReg, known as the Volcker Rule, will prohibit any banking entity from engaging in proprietary trading.

“The retail brokerage space has been split over whether regulation would touch the industry,” says Douglas Dannemiller, senior analyst with Aite Group and co-author of this report. “Now that change is imminent, preparations to comply are underway. While some regulation will go into effect almost immediately, other rules may take years, giving advisors preparation time, but also uncertainty.”

With regard to proprietary trading, John Jay, Aite Group senior analyst and co-author of this report, adds, “The Volcker Rule does not appear particularly onerous to securities firms. Firms need only shift their prop desk personnel over to their corporate trading desk, replacing, ‘pure’ capital-at-risk activities with client-centric ones.”

This 11-page Impact Note contains two figures. Clients of Aite Group's Wealth Management service or Institutional Securities & Investments service can download the report.