Though the development of a fiduciary standard for retail advisers and a possible self-regulatory organization for advisory firms may be on the back burner until after the elections, the issues remain hot-button topics for advisers.
That was obvious last Tuesday during a panel discussion at TD Ameritrade Inc.'s fall regional conference in Dana Point, Calif.
Attendees began peppering panel members with questions and comments even before the moderator, InvestmentNews reporter Mark Schoeff, opened the discussion for questions.
Kevin Carroll, associate general counsel at the Securities Industry and Financial Markets Association, and Barbara Roper, head of investor protection at the Consumer Federation of America, butted heads early in describing how a fiduciary standard might be applied when giving personalized investment advice under the Dodd-Frank financial reform law.
The brokerage industry, represented by SIFMA, wants specific rules. Mr. Carroll said the law allows parallel regulations under the Investment Advisers Act of 1940, which governs advisers, and the Securities Exchange Act of 1934, which covers brokers.
“Maybe you can have specific rules under the "34 Act” for brokers and a principles-based regime for advisers, both requiring a fiduciary standard when advising investors, he said.
Ms. Roper disagreed. “A fiduciary duty is inherently principles-based,” she said. “You can't define it down to a set of rules.”
Echoing Ms. Roper, one attendee warned of advisers' being hit with the “ungodly” number of rules covering broker-dealers.
David Tittsworth, executive director of the Investment Adviser Association, provided only slight reassurance in predicting that a single fiduciary standard probably would encompass both hard rules and broader principles of conduct.
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