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News Release (Download as PDF)
Wednesday, May 2, 2012
Institute on Wall Street Lobby (SIFMA) Proposal:
Falls Far Short of Investor’s ‘Best Interest’ Standard
In “Before Our Very Eyes,” Knut Rostad explains how SIFMA’s SEC proposal fails to comply with Dodd-Frank.
CHICAGO – Knut Rostad, president of the Institute for the Fiduciary Standard, made a strong presentation highlighting the huge gap between the SIFMA proposed standard and the fiduciary standard under the Advisers Act that complies with Dodd Frank. Rostad, presenting at the fi360 Annual Conference in Chicago, underscored how the SIFMA proposal rejects centuries-old fiduciary principles, and essentially removes the fiduciary standard for retail clients of broker-dealers.
The presentation, now available online, explains how SIFMA’s Standard is effectively designed to support the interests of SIFMA members over the best interest of investors. Whereas a true fiduciary standard emphasizes duties of loyalty and due care, SIFMA’s standard emphasizes “business model neutrality,” and, for example, the advantages to investors of conflicted advice.
“SIFMA’s standard does not meet the fiduciary standard under the Advisers Act of 1940 and does not comport with the requirements of Dodd Frank,” said Rostad. “Calling this standard “fiduciary” is like calling a certain frozen land mass ‘Greenland,’ which was named to attract residents despite having very little green.”
Fiduciary News chief contributor Christopher Carosa, who attended the conference, said: “Knut undressed SIFMA’s arguments revealing the underlying naked truth to their agenda. …[He has] a vast knowledge of the inner workings of the politics behind the battle for the fiduciary standard.”
About the Institute
The Institute for the Fiduciary Standard was formed in August 2011 as a fiduciary think tank to provide research, education and advocacy on the vital role of the fiduciary standard to all investors.
About the fi360 Conference
Fi360’s annual 2012 conference, on April 25-27, brought together hundreds of industry leaders and professionals. This is the event for professionals leading the way into a new fiduciary environment.
Knut A. Rostad, President William McBride
The Institute for the Fiduciary Standard Wm. McBride & Associates
Tel: 703-821-6616, extension 429 Mobile: 917.239.6726
Why an InstituteThe rationale for an Institute for the Fiduciary Standard is straightforward: The fiduciary standard is important, representing ideas central to our form of government and free market economy; it is under significant pressures from market forces that could sharply limit its reach; no other entity is solely focused on preserving and promoting the fiduciary standard. More...
The 6 Core Fiduciary Duties
- ‣ Serve the client’s best interest
- ‣ Act in utmost good faith
- ‣ Act prudently -- with the care, skill and judgment of a professional
- ‣ Avoid conflicts of interest
- ‣ Disclose all material facts
- ‣ Control investment expenses
Best Practices Board
- Christopher Cannon, CFA
- William C. Prewitt, M.S., CFP
- Stephen D. Johnson, CFP©
- Knut A. Rostad, MBA
- General Counsel to the Best Practices Board: Daniel Bernstein
- Clark M. Blackman II, CFA, CFP, CPA/PFS