Special Interest Groups and House Republicans Continue to Pressure SEC to Delay Formal Approval of a Fiduciary Standard for Financial Services Firms


With Republicans pressuring the Securities and Exchange Commission to back off, there is a good chance that the SEC will not promulgate a new fiduciary-standard any time soon, according to Evan Cooper’s InvestmentNews article entitled “The B-S solution to the fiduciary issue.”

SEC Chairwoman Mary Schapiro has been quoted as saying that the SEC will strive for a fiduciary standard “at least as strong as that on the investment adviser side of the business without unnecessarily limiting the choice investors have now on how to pay for or engage with a broker.”

But Republicans seem determined to prevent a regulation that would require that all persons who provide investment advice for compensation to adhere to a fiduciary standard that requires the adviser to put the investor-client’s interests first.

Republicans on the House Financial Services Committee have urged the SEC not to move forward with a universal fiduciary rule until the costs and benefits are examined yet again. “One can only guess how long that would take,” said Mr. Cooper. The SEC staff studied the issue and recommended that brokers who provide investment advice be held to the same fiduciary standard as investment advisors.

Before caving in to what is just an obstruct and delay strategy, the SEC should require a non-evasive, sensible answer to why requiring anyone who gives investment advice for compensation to put their client’s interests first is not a good idea.

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