SIFMA Executive Vice President, Randolph Snook, is poised to testify today in a House Financial Services Committee hearing that SIFMA supports "a new federal fiduciary standard of care that supersedes and improves upon the existing fiduciary standards” and is applied “to both investment advisers and broker-dealers when they provide personalized investment advice about securities to individual investors." Snook's testimony further states that a fiduciary standard should require broker-dealers and investment advisers to put investors' interests first and avoid conflicts of interest.
However, in articulating SIFMA's position, Snook further states that the new federal standard should provide "investor choice to define or modify relationships with their financial services provider based on the investor's preference" and "must be sufficiently flexible to be adapted to the products, services and advice chosen by the investor." These additional statements seem to describe something other than the fiduciary standard currently set in law that defines firm obligations an investment adviser must fulfill, and could bring into question whether SIFMA is simply using the word "fiduciary" while continuing to lobby for what is really a "universal standard of care" that adapts to the existing business models of broker-dealers. Decide for yourself and read SIFMA's position on a federal fiduciary standard starting at page 21 of Snook's prepared testimony. For more on SIFMA's decision to back a fiduciary standard, check out this Wall Street Journal article.
To see how other industry representatives plan to support a fiduciary standard in their remarks before Congress, see page 16 of the ICI President Paul Schott Stevens' testimony and page 2 of the testimony of Diahann Lassus, a representative of the Financial Planning Coalition.
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