The Board has a unique opportunity to set a true fiduciary standard, and seize the moment to benefit generations to come. In the attached letter to the SEC from the Institute, we provide further steps and protocols to manage and neutralize conflicts impact. We urge the Board to apply them.
Legislation and Rulemaking
Adviser and Broker Dealer Standard of Conduct: For generations, the Advisers Act of 1940 has served well as a “contract” between advisers and their clients. The Commission’s rulemaking here effectively puts this “contract” under review and renewal.
The proposed standards move financial planners towards professionalism on a number of fronts. Two stand out. One, in a sharp departure from the current standards, all CFPs who render financial advice are held to fiduciary conduct. Two, in the proposed standards conflicts begin to be addressed.
Fiduciary September 2014 Special Webinar with five panelists: John Taft (JT), RBC Wealth Management, Michael Falk, Focus Consulting Group, Jack Waymire, Paladin Registry, David Armstrong, WealthManagement.com, and Knut A Rostad (KR), Institute for the Fiduciary Standard
On July 14, 2011 SIFMA submitted comments to the SEC on a proposed framework for establishing a uniform fiduciary standard of conduct for broker-dealers. SIFMA’s proposal departs from the fiduciary standard as set forth under the Advisers Act of 1940 and, if adopted, would be particularly harmful to retail investors.
Contrary to what some of the comments received by the DOL/EBSA suggest, fiduciary duties are neither too “ill-defined” nor “vague” to be applied to investment advisory activities. Such duties have been applied to other professionals for centuries. Additionally, there is a significant body of case law applying fiduciary duties of due care, loyalty, and good faith upon the activities of investment advisers (both at the federal and state level).