On March 4, 2013, we published a blog entitled SEC Requests Comments and Information to Assess Standards of Conduct and Other Obligations of Broker-Dealers and Investment Advisors, that detailed the SEC’s request for comments on the possible uniform fiduciary duty and harmonized regulation for broker-dealers and investment advisors. In the wake of this, many advisor advocates are worried about the path the SEC is taking.
Duane Thompson, senior policy analyst at Fi360 stated “it looks as if the SEC is holding open the option of moving forward on rules harmonization in lieu of a fiduciary standard…if that happens, it would be a disaster for investors and investment advisors in terms of additional compliance costs.”
Mr. Thompson believes that if advisors are forced to have a “rules-based regime” like broker-dealers that the cost of doing business with skyrocket, since many advisors are small businesses and have low overhead. If the cost of doing business goes up it may force many investors out of the business or limit them from setting up their own firm.
Advisors advocates believe that there is more flexibility in the fiduciary standard that advisors operate under, i.e. acting in their client’s best interest. They do not want this to disappear.
Jason Doss is the owner of The Doss Firm, LLC, an Atlanta-based law firm devoted to representing consumers across the country in a variety of areas including investment disputes and consumer class action litigation. Mr. Doss earned his J.D. from Florida State University in 2002 and his B.A. from the University of Florida in 1997.