After his confirmation as SEC chairman, Jay Clayton is urged to tackle fiduciary standard

Financial services groups urge new SEC head to make uniform fiduciary standard a priority.
MAY 02, 2017

The Senate on Tuesday evening confirmed Jay Clayton as chairman of the Securities and Exchange Commission, and financial services groups wasted little time in urging him to pursue a uniform fiduciary standard. In a statement following his confirmation, the Financial Services Institute, which primarily represents independent broker-dealers, urged Mr. Clayton to pursue a uniform fiduciary standard rule. "Adopting a true, uniform fiduciary duty that protects investors and their access to affordable, objective financial advice must finally be given the serious attention it deserves," FSI executive vice president and general counsel David Bellaire said in a statement. The Financial Services Roundtable also put a uniform fiduciary rule at the top of its wish list for Mr. Clayton. The Dodd-Frank financial reform law gave the SEC the authority to promulgate an investment-advice rule, which it has yet to exercise. In the meantime, the Department of Labor finalized its own fiduciary rule for retirement accounts last year. That measure has been delayed and may be modified or repealed by the Trump administration. Acting SEC Chairman Michael Piwowar recently said that the agency should "reassert" itself and take the lead on fiduciary-duty policy. While Mr. Clayton sorts out his regulatory agenda, the normally five-member SEC still has two openings remaining. Mr. Clayton, the Republican Mr. Piwowar and Democratic member Kara Stein currently comprise the panel. Mr. Clayton's appointment means that for the second consecutive time, an SEC chairman will enter office with no rulemaking experience. Mr. Clayton is a partner at the prominent Wall Street law firm Sullivan & Cromwell, where he specialized in financial firm mergers and acquisitions and capital markets offerings. During his Senate confirmation hearing, Mr. Clayton revealed little about where he stands on regulatory issues affecting retail investment advisers and brokers, including raising investment-advice standards. Most Democrats opposed Mr. Clayton's nomination. Sen. Elizabeth Warren, D-Mass., said that the SEC would have "weaker enforcement" under Mr. Clayton, who she said would often have to recuse himself from disciplinary actions because of his former Wall Street clients, who included many major financial firms. "I don't have any faith that Mr. Clayton will be the tough, independent leader we need at the SEC," Ms. Warren said on the Senate floor. Republicans said that Mr. Clayton's experience in representing the financial industry would benefit him in his new job. "His extensive work in the private sector will serve him well as he looks to strengthen our financial markets, thereby supporting American businesses, boosting job creation and spurring economic growth," said Senate Majority Leader Mitch McConnell, R-Ky.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.