But if they believed that their broker's commissions were determined by certain controversial industry practices, they would strongly disapprove. Investors may be satisfied with their broker's performance, but they aren't fully aware that their best interests may compete with their broker's incentive to earn higher commissions. While the majority of older investors generally understand that brokers are commissioned sales people, they lack sophisticated understanding of how the broker compensation system works, despite having paid for broker services. Women consistently understand less than men about broker fees and commissions.
Investors are generally pleased with their brokers, but complacent about the cost of their services.
The good news, however, is that most investors have at least some fundamental knowledge about broker compensation practices. AARP commissioned the survey to determine the need and support for reform and investor education about broker compensation practices. The survey also asked investors how they felt about certain specific compensation practices that create actual or potential conflicts of interest. The investors surveyed by AARP universally disapproved of these practices. No study has measured the prevalence of these practices since they were identified by the Tully Report in 1995.