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Biden Financial Transition Team Cheers Investor Advocates

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This article originally appeared on InvestmentNews by Mark Schoeff, Jr.

The roster of President-elect Joe Biden’s transition team for financial regulation has investor advocates hopeful that a Biden administration Securities and Exchange Commission will revisit the new broker investment advice standard.

The group that is reviewing the policy and operations of the SEC and banking regulators includes several figures who have been at the forefront of financial reform in Democratic administrations or while working for Democratic lawmakers and regulators.

The team is headed by former Commodity Futures Trading Commission chair Gary Gensler, who garnered a reputation for being tough on Wall Street following the financial crisis.

Members include strong supporters of a fiduciary standard for investment advice, such as Dennis Kelleher, chief executive of Better Markets.

Other participants worked for lawmakers and regulators who fought for a fiduciary standard. For instance, Amanda Fischer is a former aide to Rep. Katie Porter, D-Calif., and House Financial Services Chairwoman Maxine Waters, D-Calif. Satyam Khanna was a counsel to former SEC Democratic member Robert Jackson Jr.

The Democratic Party platform included a plank that promised reform of Trump administration investment advice rules, presumably referring to Regulation Best Interest, which now governs brokers, and the Department of Labor’s revised fiduciary rule, which could be finalized soon.

Investor advocates criticize Reg BI and the DOL proposal as being too weak to curb broker conflicts of interest. They say the transition points to a Biden administration following through on taking another look at advice reform.

“The choice of a review team with so many strong, progressive voices on it reaffirms my confidence,” said Barbara Roper, director of investor protection at the Consumer Federation of America.

Knut Rostad, president of the Institute for the Fiduciary Standard, is enthusiastic not only about Gensler but also about the appointment of former Sen. Ted Kaufman, D-Del., as overall head of the transition.

Kaufman, who was an aide to Biden when Biden was a senator and then replaced him on an interim basis when Biden became vice president in 2009, championed banking reforms on Capitol Hill.

Rostad foresees a new approach to financial regulation.

“There’s good reason to be optimistic,” he said. “History repeats. Think Roosevelt in 1933 and Biden in 2020. With Kaufman and Gensler, the blueprint is clear.”

Read the full article on InvestmentNews.com

Dan Moisand

 

Dan Moisand is a nationally recognized fiduciary fee-only financial planner, an Institute Real Fiduciary™ Advisor and Chair-elect of the CFP Board.

The Institute has enshrined the ‘Moisand Rule’ on fiduciary practices. It is basic and is more important today than ever: “You have to avoid conflicts. If I avoid a conflict, I don’t worry about it.”

Watch the video of Moisand speaking here.

Bob Veres

 

Bob Veres is a long term observer of financial planning. His Newsletter, “Inside information” Is a staple of leading planners. In the May edition he writes about fiduciary and the Institute.

"But a much bigger point is that the fiduciary standard—as Knut Rostad of the Institute for the Fiduciary Standard has pointed out—has been determined by the Supreme Court (1963 ruling) to be at the very heart of the Investment Advisers Act of 1940. It is the foundation of what it means to be an RIA registered with the SEC instead of a tipster or a tout."

- Bob Veres, Parting Thoughts ... The SEC's Own Compliance Culture