Washington INsider

Washington INsiderblog

Mark Schoeff Jr. looks at what's really happening on Capitol Hill - and the upshot for advisers.

Apr 14, 2014, 5:10 PM EST

When a regulator like Rick Fleming sounds more like a politician, it could be a good thing

By Mark Schoeff Jr.

When the new Securities and Exchange Commission's investor advocate introduced himself publicly last week, he sounded more like a politician than a regulator. For investor protection, that could be a good thing.In his first public statement, Rick Fleming, talked about being raised by a single mother who was taking care of four kids while working as a school secretary.“I grew up poor,” Mr. Fleming told an April 10 meeting of the SEC Investor Advisory Committee. Like many politicians who debate at the U.S. Capitol, a few blocks away from the SEC headquarters, Mr. Fleming put his office in context by telling a story and establishing the narrative of helping the common person.“Going from a place like that to a place around the table like this — if you've done that, you know the American Dream is not just some sappy sentimental idea. It's something that I believe in,” Mr. Fleming said. “Investing is an... Read full post

Mar 21, 2014, 5:03 PM EST

SIFMA, Chamber give thumbs down to Finra's data collection proposal

By Mark Schoeff Jr.

Two more financial industry groups have called on Finra to rethink a proposal to collect reams of brokerage account information that the organization says will help it better detect fraudulent sales practices.The Securities Industry and Financial Markets Association, the trade group for large broker-dealers, and the U.S. Chamber of Commerce filed comment letters Friday and late Thursday, respectively, opposing Finra's Comprehensive Automated Risk Data System. They join the Financial Services Institute Inc., a lobbying group for independent broker-dealers, in criticizing the idea.The broker-dealer regulator put out a concept proposal in December. The comment deadline was Friday.SIFMA warned that financial firms would be burdened with significant technology and compliance costs and that customers' financial privacy would be put at risk.“CARDS would require firms to develop new systems and/or dramatically modify existing systems to... Read full post

Mar 14, 2014, 4:43 PM EST

Borzi counters fiduciary criticism calmly

By Mark Schoeff Jr.

When she walks into a room, it is sometimes necessary to stand up to see Assistant Labor Secretary Phyllis Borzi. But the regulator knows how to stand tall when facing financial industry opponents.Ms. Borzi's willingness to engage in a remarkably forthright way with critics of the fiduciary duty rule that she is championing was on display this week in Washington, where she appeared at a Financial Services Roundtable event focused on retirement security.She stood alone in defending the pending re-proposal of the rule, which would expand federal retirement law investment advice standards and require more financial advisers to act in the best interest of clients saving for retirement. Such a change is necessary to protect workers and retirees from conflicted advice as they build their own retirement nest eggs, Ms. Borzi said.The original measure was proposed in 2010 but withdrawn in the midst of strong backlash from the financial industry,... Read full post

Feb 4, 2014, 6:02 PM EST

Advocate says no SEC action may be preferable on fiduciary duty

By Mark Schoeff Jr.

One of the newest Securities and Exchange Commission members last week made it clear that the SEC is split on whether to proceed with a rule that would raise investment advice standards for brokers.Following a speech at the U.S. Chamber of Commerce, I asked SEC member Michael Piwowar where he stood on a regulation that would impose a universal fiduciary duty for anyone providing retail investment advice.He was forthright in stating his doubts about the need for a rule that would force brokers to act in the best interests of their clients, a bar that investment advisers must now meet but a distinction that is lost on most investors.“Even if it's the case that more confusion does lead to worse outcomes, it's not clear to me that that's enough to justify engaging in rule making,” Mr. Piwowar said. “At that point, we need to consider whether we can do more on the investor education front and the disclosure front.... Read full post

Jan 16, 2014, 1:46 PM EST

SEC on compliance: Do what you say you're doing

By Mark Schoeff Jr.

Whether a topic is appearing on the Securities and Exchange Commission's examination priority list for the first time, such as wrap-fee programs, or is making an encore appearance, such as dually registered advisers, the agency is looking at the intersection between what is good for the adviser and what is good for the client.“Conflicts of interest are the primary focus in a disclosure-based system,” Jane Jarcho, SEC national associate director of the investment adviser and investment company examination program, said this week in an interview. “As a fiduciary, you have to disclose any conflicts or potential conflicts.”That theme runs throughout the list. Here is Ms. Jarcho's take on some of the items.Wrap-fee programs: The SEC will assess whether financial advisers are fulfilling fiduciary and contractual obligations to clients when using these vehicles. A particular concern is whether buy-and-hold clients are... Read full post

Jan 7, 2014, 1:12 PM EST

Fate of tax extenders will be clear only after long wait

By Mark Schoeff Jr.

As Congress goes back to work this week, broad tax reform appears to be dead, and the fate of tax extenders may not be resolved until late in the year.It is shaping up to be another wait-and-see exercise on tax policy, which will once again make tax planning a challenge for investment advisers and their clients.Just before going on its holiday recess, Congress reached a bipartisan agreement on a budget framework for the next two years that set spending levels and prevents a government shutdown. But the accord avoided tax reform.“It tells us that they haven't found any common ground on the direction of tax policy for the next year, or they would have addressed it,” said Timothy Steffen, senior vice president and director of financial planning at Robert W. Baird & Co. Inc.The budget agreement didn't contain a road map for broad tax reform nor did it deal with the 57 so-called tax extenders, or tax breaks that have been... Read full post

Sep 20, 2013, 4:44 PM EST

Finra goes social

By Mark Schoeff Jr.

Most investment advisers shudder when they think about Finra in relation to social media. They worry about complying with the broker-dealer regulator's guidance on Internet behavior and wonder whether their next Tweet or Facebook post may get them into trouble.This week, however, the Financial Industry Regulatory Authority Inc. reminded advisers that it's not just focused on monitoring what others are doing in cyberspace -- it's a participant in social media itself. On Thursday, I knew that the Finra board was due to make a big decision about a rule on broker-dealer compensation. I checked its website obsessively for any clue about what had transpired. While I was waiting for something to be posted, I scrolled through my Twitter feed – and found the answer I was seeking.Finra made the board's move known by tweeting a link to its press release. The statement itself didn't hit my inbox until several minutes later. Those of us on... Read full post

Aug 23, 2013, 2:55 PM EST

Festive fall on tap for Washington but action is another thing

By Mark Schoeff Jr.

Investment advisers are once again wondering what will happen with tax policy when Congress returns to work next month after its summer recess.The fall is likely to be festive, with lawmakers and the White House wrangling over the federal budget and the debt ceiling in a tussle that might not be resolved until December. Along the way, a government shutdown and financial-market turmoil are risks.Even though many tax rates were settled in January's fiscal cliff bill, negotiations may put some taxes in play.“Revenue is going to be needed from a lot of different sources,” said Stanley Smiley, senior vice president of the advance planning group at Cetera Financial Group. “Nothing seems to be permanent [with Congress].” Dusty Wallace, director of financial planning at Lee Financial Corp., said many of her clients have seen tax increases as high as $10,000 this year. But she's not confident that's the end of the story.... Read full post

Aug 15, 2013, 4:01 PM EST

Lobbyists put hands in sausage maker

By Mark Schoeff Jr.

When Congress comes back from its summer recess in September, lawmakers will only have a few weeks to press the Department of Labor to delay a pending proposal to strengthen investment-advice rules for retirement plans.Originally floated in 2010, it would expand the definition of “fiduciary” and apply retirement-law advice requirements on a wider range of advisers. It was withdrawn following fierce opposition from the financial industry, which asserted that the rule would threaten commissions for brokers selling Individual Retirement Accounts. The DOL maintains that tougher rules are required to protect investors from conflicted advice, as they build their retirement nest eggs on their own through defined contribution plans. A re-proposal is expected in October. With the clock ticking, the situation is becoming tense – and lobbyists are earning their money. But are they going too far?A recent article in the magazine... Read full post

Aug 2, 2013, 1:58 PM EST

At least one new SEC commish to bolster cost-benefit push

By Mark Schoeff Jr.

An emphasis on the costs and benefits of regulations at the Securities and Exchange Commission is likely to grow stronger as it welcomes two new members.The Senate unanimously confirmed Democrat Kara Stein and Republican Michael Piwowar on Thursday night to serve as SEC commissioners. Both former Senate Banking Committee aides, Ms. Stein replaces Elisse Walter and Mr. Piwowar takes over for Troy Paredes. The Senate also confirmed new SEC Chairman Mary Jo White for a full five-year term, until June 2019.Mr. Piwowar represents a different perspective for the commission, which is often comprised of lawyers. He was the Senate banking panel's chief Republican economist. Following the tradition of executive branch nominees, he revealed little about his policy preferences during the confirmation process.But it's probably safe to say that his ascension to the five-member SEC underscores Republican insistence that the agency rigorously review... Read full post

Earlier Posts »

  @IN Wire

Apr 17 05:13PM
After this week's big TIAA-CREF-Nuveen deal, a boom in fund manager mergers could be on the way: http://t.co/snuNuN4aWJ
Apr 17 04:39PM
As Heartbleed causes online heartburn, #SEC provides detailed cybersecurity checklist for advisers. http://t.co/DqpkfaFpmF @newsfromIN

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