Ameriprise Financial Inc. CEO James Cracchiolo on Tuesday welcomed the Securities and Exchange Commission's new investment advice rule.
During a conference call with analysts, Mr. Cracchiolo was asked his reaction to the SEC's announcement last week.
"So first of all, we're going through the details of this more than 1,000 pages," Mr. Cracchiolo said, according to a transcript of the call. "On the surface, it looks very good in a sense that it is a bit more principles-based, and it's a more appropriate" regulation, he said.
Broker-dealers like Ameriprise spent tens of millions of dollars and untold hours overhauling policies to comply with the Department of Labor's all but defunct fiduciary rule. The rule raised the bar for broker's advice in retirement accounts, but pushed firms to revamp compensation methods and their product platforms.
Many senior brokerage executives, while in favor of some kind of fiduciary standard for brokers, privately complained that the DOL fiduciary rule was difficult to live with and hard to implement. Advisers' businesses slowed down or froze up as they were preparing for the DOL fiduciary rule.
Times have changed. The DOL rule is on the shelf, and the SEC this month has officially proposed its investment advice rule.
That had Mr. Cracchiolo feeling sanguine Tuesday morning.
Calling the SEC's proposal "supportable regulation," Mr. Cracchiolo said it was "appropriate for us and the industry to conduct business, but still serve people in their best interest, which we fully support," according to the transcript. "So, we're very encouraged by it, but we think it is appropriate for the SEC to take the broader role and have [a rule] consistent across all of our activities. We're very favorable to that."
Not everyone agrees with Mr. Cracchiolo, of course.
Massachusetts Secretary of the Commonwealth William Galvin last week criticized the SEC proposal for not subjecting brokers to a fiduciary standard, which already governs investment advisers' interactions with their clients.
"The SEC is proposing a watered-down standard that simply restates current industry rules and allows certain dangerous conflicts to persist," Mr. Galvin said in a statement.
For the first quarter of 2018, Ameriprise said it had recruited 79 advisers, pushing the total adviser workforce to 9,881.
