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Tick, tick, tick ... FINRA rewrites 'culture,' 'conflicts of interest' and 'ethics' into a farcical 'best interests' code after DOL drops a bomb on its suitability ethos

In its latest burst of bureaucratic creativity, the wirehouse cop acknowledges the scourge of Wall Street culture then quickly excuses the behavior it elicits

Author Guest Columnist Ron Rhoades January 29, 2016 at 6:33 PM
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Richard Ketchum professed support for a fiduciary standard,then, in the same speech, opposed the DOL's proposed rule-making, calling it 'problematic.'

RIA Compliance

Stephen Winks

Stephen Winks

January 29, 2016 — 11:40 PM

Ron Rhoades accomplishes what the investing public expects FINRA to do, to clarify and authenticate the role and responsibilities of the broker when rendering advice. There is little opportunity for disagreement with his expert assessment, leaving the question of whether FINRA is acting as an advocate for brokerage industry interests rather than the best interest of the investing public. It is clear to all, to include FINRA itself, that FINRA’s policies concerning fiduciary duty deny “retail investors” who need the most help, the same consumer protections accorded to all other investors. Mr. Ketchum might want to explain why there is any difference between the best interest of retail investors and other investors. Ron Rhoades has made a compelling and definitive case for the “client’s best interest and the fiduciary duty required of all who render advice. Mr. Ketchum is terribly unconvincing in making FINRA’s case which undermines public trust and suggests a rigging of industry regulation not in accord with century’s of common law understanding of fiduciary duty..
Stephen Winks



August 17, 2016 — 11:55 PM

I do not have any significant issues with what is presented. But the one thing that suitability or fiduciary duty requires is knowledge. Having taught almost all the securities, insurance et al courses, the fundamentals of investing have never been taught to brokers or registered investment adviser. They are not tested- hence not required. FINRA, the SEC, NASSA and more have a monstrous effort ahead of them in order to do the right thing. Per Schwartz- “Although scholars assumed that ordinary investors would not have that ability, they anticipated that sophisticated market intermediaries — such as brokers, bankers, investment advisors, publishers of investment advisory literature, and even lawyers – would help filter the information down to investors.” After decades in this business, I just don’t think it will happen. The UPIA is way out of date and the DOL ruling cannot work in real life. http://efmoody.com/DOL%20ruling%206.5.2016.pdf

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