Poster Abstract - Cincinnati Oct/Nov 2025
Financial regulation was originally enacted to defend against systemic instability and market failures, but consistent with the law of unintended consequences, has come to exert undue influence on wealth distribution in the United States. This poster will illustrate the intimate connection between societal wealth patterns and financial architecture as part of my research question, “An Exploration into the Financial Advice Industry: How Broker-Dealer Grids Contribute to Wealth Disparities.”
Regulatory responses to historical events created today’s Broker-Dealer grids. A broker-dealer is a firm or person that is engaged in the business of buying and selling securities. As a broker, a firm connects advisers to the markets and serves as a regulated, compliance focused intermediary. As a dealer, a firm can buy for its own inventory and re-sell. Advisers are compensated through a “grid system” which links their compensation to the revenue generated for their broker-dealer.
Agency theory and asymmetric information form the basis for many of the conflicts of interest and regulatory concerns that arise from this grid system and will be used to showcase how financial advice is linked to the wealth gap. Overall, the evidence will demonstrably establish that regulations have affected the concentration of wealth and capital (Conrad, 2012), key players in the widening wealth gap, via these grids.
The period after the 1929 market crash was characterized by stringent regulatory oversight, exemplified by the New Deal era (1933-1939), and correlated with a reduction in wealth disparities. Conversely, contemporary history marked by significant deregulation (1980s-late 1990s), coincided with a notable acceleration in wealth concentration in the highest echelons of society. Most recently, regulations sparked by the 2008 financial crisis ignited complex and sometimes contradictory outcomes which, much like the response to the Great Depression, were designed to address systemic risk but regrettably, re-opened pandora’s box (Google 2025).
The methodology depicts a historical analysis featuring a visual timeline of key regulatory changes including the Dodd-Frank Act (2010), Regulation Best Interest (2019), and the Department of Labor's Fiduciary Rule (2024). The poster will also match that timeline to the structure of the compensation grids before and after each key regulation.
References: Conard, E. (2012). Unintended consequences: Why everything you've been told about the economy is wrong. Portfolio/Penguin
Google. (2025). Gemini [Large language model].