The Financial Planning Coalition issued the following statement regarding Securities and Exchange Commission (SEC) Chair Mary Jo White’s announcement at the SIFMA Compliance and Legal Society Annual Seminar that she personally believes that the SEC should implement a uniform fiduciary duty for broker-dealers and investment advisers.
“We applaud Chair White for her view that a fiduciary rulemaking to protect investors is long overdue. American investors have suffered for too long from advice that is not necessarily in their best interest. Even as the Department of Labor (DOL) advances a separate fiduciary proposal for retirement assets, the SEC should now boldly move forward with its own rulemaking to close the harmful gap between advice provided by investment advisers under a fiduciary standard and the merely ‘suitable’ advice currently allowed by broker-dealers.
“It has been nearly five years since Congress authorized the SEC to adopt a uniform fiduciary standard under the Dodd-Frank Act, and four years since SEC staff recommended the adoption of a fiduciary standard that is ‘no less stringent than currently applied to investment advisers under the [Investment] Advisers Act [of 1940].’ We again urge the SEC to move forward thoughtfully and promptly to propose a rule that is consistent with this recommendation. American investors deserve advice that is in their best interest.”
Financial Planning Coalition research shows that American consumers want greater investor protection, including through the adoption of a fiduciary standard. In response to a 2013 survey, 93 percent of respondents said that they agree with the statement that financial advisers “should put your interests ahead of theirs and should have to tell you upfront about any conflicts of interest that potentially could influence that advice” – the very definition of the fiduciary standard.