Dan Gallagher, chief authorized officer of Robinhood, stated in July that “it might be good” to have an SEC greatest execution rule.
Ron Rhoades, affiliate professor of finance at Western Kentucky College and director of its private monetary planning program, informed ThinkAdvisor Wednesday in an e mail that if the Fee “really desired to make sure greatest execution, they’d outlaw fee for order move.
“This might lower bid-ask spreads considerably, but in addition consequence within the return of commissions,” he defined. “Total, customers can be higher off, as larger transparency in how broker-dealers are compensated, together with the elimination of the battle of curiosity inherent when brokers obtain fee for order move, would end in larger competitors and lowered transaction prices.”