InvestmentNews has published an article expressing its strong support for a rule that requires brokers and investment advisers alike to adhere to the highest fiduciary standard of conduct: “In the name of investor protection, we urge the Securities and Exchange Commission to exercise its rulemaking authority to require brokers to act in their clients’ undivided best interests at all times. See “SEC should require fiduciary standard,” InvestmentNews, January 16, 2011.
“Under such a standard, all advisers ? regardless of whether they were associated with broker-dealers or investment advisers ? would be required to put the client’s interests first; act with the skill, care, diligence and good judgment of a professional; provide full and fair disclosure of all important facts; avoid conflicts of interest, and fully disclose and fairly manage, in the client’s favor, any unavoidable conflicts,” the article continued.
InvestmentNews’ call to action comes as the Securities and Exchange Commission, which, as the article points out, has “investor protection” as part of its mission, is considering a universal-standard-of-care rule that covers anyone who provides personalized retail investment advice.
Strong action by the SEC is particularly important in today’s world, as the article points out: “In an era when cost cutting has led many public companies to pull the plug on defined-benefit pension plans ? thereby forcing individual investors to shoulder the responsibility of funding their own retirements ? it is incumbent on the SEC to make sure that investors receive the same high level of protection, regardless of whether the adviser sitting across from them is a registered representative of a broker-dealer or an investment adviser.”
“No matter how advisers are regulated, the SEC must not abdicate its duty to protect investors. In a world where the line between a broker and an investment adviser is fuzzy at best and misleading at worst, the only way to fulfill that duty is to require any provider of investment advice ? even a broker giving advice that is incidental to a transaction ? to adhere to the fiduciary standard.”
InvestmentNews also reiterated its call for FINRA’s authority to be expanded to include oversight of investment advisers.
Page Perry is an Atlanta-based law firm with over 125 years collective experience representing institutional and individual investors in securities-related litigation and arbitration all over the country. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 40 occasions.