Brokers who want to set up their own advisory businesses have a lot of compliance issues to consider, especially when they plan to hold licenses through both of the top U.S. securities regulators instead of just one.

The allure of more income and independence drives many brokers to set up their own practices. They often set up an advisory firm that registers with the U.S. Securities and Exchange Commission, and also affiliates with an independent broker-dealer licensed through Wall Street's industry-funded watchdog, the Financial Industry Regulatory Authority (Finra).

These so-called "dually-registered" firms are one of the fastest-growing sectors in the securities industry. Dually-registered firms managed nearly $1.1 trillion at the end of 2012, a 21.5 percent spike from 2011, according to Cerulli Associates, a financial services industry research firm in Boston. Its 2013 data is not ready.

But that freedom typically triggers a brand-new set of compliance responsibilities. Holding licenses through two regulators means more scrutiny than an advisor may anticipate.

The SEC, for example, is honing in on dually-registered advisors as part of its 2014 program for examining firms, according to a list of "priorities" it published on January 9. Among its concerns: "reverse churning," a practice in which brokerage firms trade very infrequently in accounts they manage for fixed fees.

At issue are two different ethical standards: Advisors who register with the SEC or states are "fiduciaries" and, therefore, must give advice in clients' best interests. But those who also hold licenses through FINRA are bound by other regulations that require recommendations to be "suitable" for investors, based on factors such as risk tolerance or age. There may also be differences in regulations for record-keeping, disclosures and other issues, say compliance professionals.

Advisors with dual-licenses provide advice for a flat fee through the firm's investment advisory arm -- typically a percentage of the total assets under management -- but may also offer services through the firm's brokerage arm, such as accounts in which clients can stash money for college.

A big challenge for dually-registered advisors is making sure clients know the standards in play and when they apply.

"The fact that the SEC has a separate category called 'dual registrants' speaks volumes,' said Kevin Taylor, chief compliance officer of Pershing Advisor Solutions LLC, a unit of Pershing LLC, a subsidiary of The Bank of New York Mellon Corp.

While the business model itself is not a problem, some advisors jump in without thinking through their new compliance responsibilities, Taylor said.