SEC advice rule proposal assailed by former agency economists

SEC advice rule proposal assailed by former agency economists
Letter cites proposal's 'weak and incomplete' economic analysis.
FEB 11, 2019

The Securities and Exchange Commission plan for overhauling broker conflict-of-interest rules is coming under fire from an unusual source: a group of its former top economists. In a sharply worded comment letter, 11 former SEC officials faulted the proposal released last April under the direction of Chairman Jay Clayton, citing what they called "weak and incomplete" economic analysis. "We find it worrisome that the proposal's economic analysis does not fully consider some potentially important dimensions of the retail client-adviser relationship," the officials wrote in the letter dated Feb. 6. Mr. Clayton has made completing the regulation, which would replace an overturned Labor Department measure, a top priority and held meetings around the country last year to hear from investors. He's said he's open to changes as progressives have argued that the proposal didn't go far enough and critics from both parties have said the "best interest" obligation it would impose is too vague. The current proposal "seems to fall short of the best attainable analysis, and we are concerned about the commission's reputation for doing careful economic policy analysis," the former SEC officials wrote in their letter. "We encourage the commission to do better." A spokeswoman for Mr. Clayton didn't immediately respond to a request for comment. (More: Best the SEC can do or huge step backward? Industry leaders tussle over advice reform)

Latest News

Fintech bytes: Envestnet reaffirms $1B RIA commitment with Tamarac tech investment
Fintech bytes: Envestnet reaffirms $1B RIA commitment with Tamarac tech investment

Also, Orion has added BlackRock, Fidelity, and Vanguard to its custom portfolios suite, and RedBlack has set up a new headquarters after crossing a trillion-dollar milestone.

RIA moves: Maridea acquires multigenerational practice in Pennsylvania debut
RIA moves: Maridea acquires multigenerational practice in Pennsylvania debut

Also, New York-based Legacy Edge Advisors names its first-ever CEO, while Novare Capital Management hires a Vanguard veteran with a multigenerational planning focus.

Private equity eyes 401(k) plans, but fees remain a hurdle
Private equity eyes 401(k) plans, but fees remain a hurdle

Asset managers are racing to bring private market products to retirement plans, but cost and liquidity concerns linger.

IRS floats proposal ending tax breaks for schools that weigh race
IRS floats proposal ending tax breaks for schools that weigh race

Treasury's latest tax-exemption crackdown on private schools lands in the wake of a separate push to restrict refundable credits for some immigrant filers.

Trust over tech:  The hidden signal of stock success in the AI era
Trust over tech: The hidden signal of stock success in the AI era

Workforce trust measures predicted which companies came out ahead during COVID-19. The same dynamic may now be playing out across the AI transition — and the data suggests the spread could be just as wide.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income