Editorial

Happy anniversary, Dud-Frank law

Jul 20, 2014 @ 12:01 am

+ Zoom

Today marks the four-year anniversary of the Dodd-Frank financial reform law, arguably the most sweeping piece of legislation to come out of Congress since the Great Depression.

Big whoop.

According to Hallmark's list, the traditional four-year anniversary gift is fruit. In light of the pitiful lack of progress made on many of the rule-making requirements under the law, might I suggest a lemon?

For financial advisers, Dodd-Frank has been even less ... well, “impactful” (I can see my fellow editors convulse as that word appears on their computer screens).

That's because only a handful of the 398 rule-making provisions in the law have a direct effect on financial advisers. And most of those have been banished to regulatory purgatory.

UNFINISHED BUSINESS

The first piece of unfinished Dodd-Frank business that comes to mind is a rule to raise investment advice standards for broker-dealers. The law gave the Securities and Exchange Commission the authority to impose a uniform fiduciary standard for retail investment advice but didn't require it.

Forget about it. Because of the politics involved in creating a uniform standard, it's not surprising that regulators took the path of least resistance and did nothing.

The next gives the SEC authority to end mandatory arbitration for investor disputes.

Not going to happen — at least not anytime soon. That's because the provision is opposed by too many deep-pocketed groups and corporations, which say keeping the disputes out of court helps reduce costs and prevents frivolous litigation.

As anniversaries go, the passage of Dodd-Frank ranks right up there with the anniversary of starting a new job: It's nice to note, but there's work to do.

fgabriel@investmentnews.com, Twitter: @fredpgabriel

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

INTV

Special Needs Special Planning

Financial adviser John Nadworny’s path to help his son James led to his business focus on special needs planning.

Video Spotlight

Are Your Clients Prepared For Market Downturns?

Sponsored by Prudential

Recommended Video

Path to growth

Latest news & opinion

HighTower faces pressure to let investors cash out

After an IPO planned for last year didn't happen, the company could opt to satisfy its backers with a sale.

Jerry Schlichter's fee lawsuits have left an indelible mark on the 401(k) industry

After a decade of litigation, fees are lower and retirement plans are more transparent. But have the lawsuits gone too far?

10 best financial adviser jokes

How many financial advisers does it take to screw in a lightbulb?

With margins crashing, broker-dealers look to merge: report

Increased regulation is straining profit margins among broker-dealers, sending many of them into the arms of their bigger brethren.

Hackers may have profited from SEC breach

The hack of the agency's Edgar filing system occurred in 2016, but the regulator didn't conclude until last month that the cybercriminals may have used their bounty to make illicit trades.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print