by Knut A. Rostad and Darren M. Fogarty — New insights into retail investor, financial reps misunderstandings of brokers and advisers.

In 2016 and 2017, the Consumer Federation of America reported in three separate comment letters that 34 financial firms changed their products and/or product offerings to comply with the DOL Fiduciary Rule. They did so against a backdrop of industry criticism that the Rule would be harmful not only to their own business models, but to their customers and clients as well. Some of the very same firms heftily contributed to that backdrop. However, in announcing their new products and offerings, many of these same firms reversed their position on the impact on investors. Now, they believe such changes are overdue, prudent, and beneficial to customers. Why the switch? And will such product improvements survive the recent vacatur of the DOL Rule? Time will tell.

Advisor DNA found in the Advisers Act of 1940 and championed for generations is objective advice. Yet, some reject this bedrock principle.

CFPB is reviewing its “Ethical foundation for CFP certification.” This review is timely. The advice market is undergoing a basic transformation. New technologies, the DOL Rule, more demanding investors and lowering costs are change agents. Higher ethical standards are in demand. CFPB should answer the call and lead.