We've been focusing on this topic a lot lately, so I'll be brief. Blaine's latest Fiduciary Corner column throws our support behind the ideas of SEC Commissioner Luis Aguilar. Chief points among Aguilar's comments during a recent speech at the Investment Advisor Assocation's annual conference were:
- “There is only one fiduciary standard and it means that a fiduciary has an affirmative obligation to put a client's interests above his or her own.”
- "[None of the alternative proposals] measures up to the fiduciary standard that currently exists, and there is great concern that these proposed standards may have the effect of diluting the existing high fiduciary standard that serves as an important investor protection.”
- The SEC was orginally given oversight of investment advice, brokers were exempt because, at the time, they weren't giving advice. Now that they are giving advice, they should fall under the same oversight as the investment advisors who have always been regulated by the SEC.
- All the SEC needs to successfully take on this role for what would be a much greater pool of advisors is increased resources.
The logic of this proposal makes the most sense to us. It is the brokers who have transitioned their models to include the provision of investment advice, so why should regulation and oversight cater to them with a watered down fiduciary standard? We also prefer the idea of a more adequately resourced SEC for oversight than a conflicted SRO like Finra.
There is clearly a lot at stake for the impeding reform. And, with a lot to lose, there are well-organized, well-funded groups who will vigorously defend their interests. Aguilar's proposal prefers the interests of investors over those of those who are supposed to serve them. If you agree, we urge you to contact the SEC and your elected representatives to voice your support. Here are additional resources for you get involved:
- Our letter to the SEC in support of Aguilar
- Our recent Webinar on regulatory reform
- Contact information for the SEC, the House and the Senate for you to submit your own letter
Make sure you read Blaine's full article at InvestmentNews.com and click the "Recommend" button at the top of the page if you like it. And, make sure to leave your thoughts in the comments section below.
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