SIFMA presses for single fiduciary standard for retail stockbrokers

SIFMA wants regulators at the Securities and Exchange Commission and the Labor Department to move forward together on creating a single fiduciary standard of care for retail stockbrokers, thus avoiding a tangle of multiple standards when new rules are eventually proposed. That was the assessment this morning of T. Timothy Ryan, president and chief executive of the Securities Industry and Financial Markets Association. He was speaking in Miami Beach, Fla., at the association's compliance and legal society annual seminar. When asked what he thought the SEC would do when it came to rule making on a fiduciary standard, Mr. Ryan was quick to note that the securities industry had more than one federal agency to worry about. “It's not just the SEC we're concerned about, or working with, but we also have the Department of Labor, which simultaneously has entered this whole question of what are the requirements for the people in our business when dealing with individuals,” he said. “For the first time, the Labor Department has entered the fiduciary arena for” investment advice given to defined-contribution plans and individual retirement accounts, he said. Creating a new fiduciary standard, which SIFMA supports, is “accomplishable,” Mr. Ryan said. “We'd like to see the SEC and the Department of Labor move forward together, so that we actually have one standard, not multiple standards,” he said. “My hope is we see something from the regulatory agencies, if not this year, than early next year so we could comment on and basically really level the playing the field for advice.” In January 2011, the SEC released a report that recommended a common fiduciary standard for brokers and registered investment advisers. Brokers most currently meet a suitability standard, while advisers have long operated under a fiduciary standard. A common standard is needed as many retail investors don't understand and are confused by the different roles of broker-dealers and investment advisers, the SEC report stated.