News, Vision & Voice for the Advisory Community


Old foes in the fiduciary debate join new battle to sway SEC's six-month study

Advocates were working down to the wire to submit comments by the end of yesterday

Author Elizabeth MacBride August 31, 2010 at 5:31 AM
1 Comment
no description available
Summer's last gasp: Advocates for advisors and broker-dealers were putting in long days to prepare comments on the fiduciary standard to send to the SEC's Mary Schapiro and the other commissioners.

Women of Wealth Management

Stephen Winks

Stephen Winks

August 31, 2010 — 11:33 PM

It really makes no difference what the brokerage industry (SIFMA/FINRA), the independent broker/dealer industry (FSI), the insurance industry or the adviser industry (Financial planning Coalition/IAA) say. The SEC has been charged by Congress to create a standard of care in the best interests of the consumer “with out regard to the financial or other interests of the broker, dealer or investment adviser”. Thus the question is for each consideration raised is what is literally in the best interest of the consumer and can the consideration be professionally managed in the client’s best interests. On both counts, advice advocates have won every arguement while broker advocates thwart innovation and modernity. The assumption of the brokerage/insurance industry is that brokerage firms will prevail upon the SEC to protect the industry’s best interests without giving the consumer a voice in regulation nor protecting the trust of the investing public. I think the brokerage industry is mistaken.

The SEC understands that the brokerage industry has ruined public trust by simply maintaining that brokers do not render advice thus absolving brokers from any responsibility for their investment recommendations in arbitration proceedings in managing client disputes. For the first time the SEC has been given the authority to harmonize both brokers and advisers in the client’s best interest under one regulatory regimen, based on objective, non-negotiable fiduciary criteria of statute, case law, regulatory opinion letters and 800 years of common law. This means by definition how we approach portfolio construction and management must change as we move from selling investment product to addressing and managing investment and administrative values on behalf of the client in their best interests. Of course this requires innovation and modernity with the proper resourcing of advisers in providing the prudent processes, technology, functional division of labor, the statutory documentation, conflict of interest management and expert advisory services support necessary to make advice and fiduciary standing safe, scalable and easy to execute.

Modernity is in the best interest of the client. Anyone who speaks to the contrary are solely thinking about their best interest, not that of the connsumer. When the advisor and industry value proposition is fully fleshed out, the adviser safely and easily delivers an unprecedented level of investment and administrative counsel, while the industry streamlines cost and achieves higher earnings, margins and earnings multiple more like an asset management firm than a brokerage firm, all in the client’s best interest. There is no counter arguement which can be made. We have answered ever question. It is really all about the brokerage and insurance industry’s not wanting to place the best interest of the client ahead of their own self interests which is at cross purposes of the Congressional directive to the SEC.


Related Moves

June 7, 2024 at 1:44 AM

Biz Briefs: AdvicePay waives key hiring requirement to land its next CEO • ESG firms may get OK in Oklahoma • eMoney adds new chiefs • CFP Board names new chair-elect • Robinhood cuts more staff

Alan Moore replaces himself with another guy with two respectable titles • eMoney promotes two • Moisand's third in line now known • Robinhood sacks 173 in year-to-date.

July 26, 2023 at 2:34 AM

Biz Briefs: Vanguard's tax-loss harvest yields a caveat• Vermont green with envy ... of red states? • CFP Board spends $12 million on bungee metaphor • BlackRock isn't neutral on Credit Suisse • Women are the Goliath of 'David' in UK finance

Tax-loss harvest gains may have some home assembly required, says Jeff DeMaso • Adrian Johnstone is now in the driving seat at Practifi • CFP Board spending just topped $150 million • and Vermont shares some Texas thinking on ESG investing.

March 25, 2023 at 1:32 AM

Charles 'Chuck Schwab' called James Gorman to protest a two-broker poach, kicking off a hydra-headed legal battle, costing Morgan Stanley millions, so far

The Schwab founder and chairman invoked Charles Schwab Corp.'s zero-tolerance policy against Wall Street -- or RIA -- poaching of talent and AUM from Schwab branches.

March 9, 2023 at 1:23 AM

See more related moves

Mentioned in this article:

National Association of Personal Finance Advisors
Top Executive: Geof Brown, CAE

Investment Adviser Association
Top Executive: David G. Tittsworth

Financial Planning Association
Top Executive: Lauren S. Schadle, CAE, Executive Director and CEO

RIABiz Directory

The Industry Sourcebook for RIAs

   |    LISTING

RIABiz Directory sponsored by:

Directory Sponsor Logo

White Paper Postings

Common Tags

Recent Articles

Popular Writers

RIABiz logo


About Us




RIABiz, Mill Valley, California
Copyright © 2009-2024 RIABiz Inc. All rights reserved.