Results for "The Washington INsider"

Jul 31, 2019, 3:05 PM EST

CFP Board's effort to strengthen enforcement could sharpen teeth of fiduciary duty


By Mark Schoeff Jr.

The CFP Board recently delayed enforcement of the elevated advice requirement for its designation until next June. It can use the extra time to bolster its ability to give the new standard sharper teeth.Under the new rule, the approximately 85,000 CFP holders in the United States will have to act as fiduciaries at all times when working with clients, not just when they're performing financial planning functions. The new approach was set to begin in October. Moving enforcement back to June aligns the Certified Financial Planner Board of Standards Inc. with the implementation date of the Securities and Exchange Commission's new investment advice standard, the centerpiece of which is Regulation Best Interest for brokers.Before then, the CFP Board will have received recommendations from an independent task force it has created to improve its enforcement practices. The task force was established in response to a Wall Street Journal article... Read full post

Apr 19, 2019, 1:26 PM EST

When disclosing conflicts of interest, wiggle words like 'may' may not be good enough


By Mark Schoeff Jr.

The Securities and Exchange Commission and journalists have something in common. Both are leery of wiggle words like "may."Editors always prefer that reporters file stories that offer certainty for readers. If they write that something "may" happen or "could" result in dire consequences, editors sometimes tell them to find something more concrete with which to lead the story.The SEC's problem with "may" revolves around disclosures of conflicts of interest. If the conflict is there, investment advisers better say so, rather than describing the potential conflict as something that "may" affect their recommendations to clients.A case pending in the U.S. Court of Appeals for the D.C. Circuit focuses on this situation. The Robare Group, a registered investment adviser, has appealed an SEC administrative decision to sanction the firm for failing to disclose conflicts connected to a revenue sharing arrangement it had with Fidelity Investments ... Read full post

Feb 22, 2019, 3:03 PM EST

Is Reg BI headed for the courts?


By Mark Schoeff Jr.

Opponents of the Labor Department's fiduciary rule killed it last year in the courtroom. Those set to fight the Securities and Exchange Commission's coming advice reform regulation might also brandish the legal sword to see if it cuts both ways.The DOL rule, which would have required brokers to act in the best interests of their clients in retirement accounts, was vacated by the U.S. Court of Appeals for the Fifth Circuit. The decision held up when the Trump administration failed to defend the measure.The brokerage industry plaintiffs asserted harm to their sector caused by what they called the DOL's regulatory overreach. Could investment advisers make a similar claim that the SEC proposal — the centerpiece of which is Regulation Best Interest — harms them, and file a suit?Yes, it is early for such speculation. The SEC probably won't release a final rule until this summer. But, then again, football fans start debating who ... Read full post

Oct 9, 2018, 2:59 PM EST

New Jersey could be first in fiduciary 'blue wave' with pending proposal

New Jersey

By Mark Schoeff Jr.

A calm surface on the waters of investment advice reform is about to be broken by what could be the beginning of a fiduciary blue wave at the state level.Next Monday, the New Jersey Bureau of Securities is expected to release for public comment a proposed rule that would require all financial advisers in the state to put their clients' interests ahead of their own when making investment recommendations. This statewide fiduciary duty could very well conflict with the final advice rule the Securities and Exchange Commission is expected to promulgate later this year or in early 2019. With the SEC reviewing thousands of comments about its proposal, the advice reform issue has been relatively quiet for a few weeks. That is set to change.Other states could join New Jersey in drafting their own standard. In Nevada, there is already a fiduciary law on the books. But the state's securities regulator has not yet proposed the regulations that... Read full post

Sep 11, 2018, 5:06 PM EST

Shorthanded SEC may have to decide investment advice proposal on its own


By Mark Schoeff Jr.

For the moment, the Securities and Exchange Commission has a full complement of five members, but it may not last for long. Last week, the Senate confirmed Elad Roisman to a Republican seat that had been vacated by Michael Piwowar in July. It was an odd occurrence because SEC vacancies are usually filled in tandem, with the Senate approving a Republican and a Democrat. Democratic SEC member Kara Stein, whose term ended last year, has to depart by the end of the current Congress in December.Mr. Roisman traveled alone because Senate Democrats had trouble settling on their own nominee. Finally, Allison Lee, a former SEC enforcement official, was forwarded to the White House, according to published reports. The Trump administration has not acted, while the legislative calendar winds down quickly in advance of November's midterm elections. The confirmation process usually takes months."I'm one of many people who simply does not know why the ... Read full post

Jul 23, 2018, 3:54 PM EST

Democrats criticize SEC advice rule, push for fiduciary standard


By Mark Schoeff Jr.

Midterm elections usually don't generate the same energy as presidential elections, but this year is different because it is shaping up as a referendum on President Donald J. Trump.If Democrats take over the House — which many analysts see as a good possibility — and perhaps the Senate — a long shot — the outcome also could potentially affect the Securities and Exchange Commission's investment advice reform proposal.Over the last couple weeks, Democrats have made clear that they don't think the SEC has gone far enough. The latest example is a letter from three Senate Democrats, including Sen. Elizabeth Warren of Massachusetts, urging the Financial Industry Regulatory Authority Inc. to weigh in on the SEC's recommendations. They asserted that the way Finra interprets and enforces the SEC's proposal to raise broker standards would determine whether such a rule increases investor protection.In their letter, the ... Read full post

Jul 19, 2018, 1:50 PM EST

Behind closed doors: The big problem with how the SEC is getting insights from investors


By Mark Schoeff Jr.

Usually when I receive a news release about an upcoming event on my beat that's occurring at at the Securities and Exchange Commission, I put it on my coverage calendar and just show up.Something moved me to register for the recent investor roundtable at the SEC's headquarters in Washington. Good thing I did. It saved me a futile trip.It turns out that I wasn't welcome at the July 12 session because it was closed to the media. The audience for the approximately one-hour event was about two dozen people who use a financial adviser. The SEC assembled them to discuss the investment-advice reform proposal that is open for public comment until Aug. 7.Specifically, the investors responded to the disclosure portions of the proposal, which are designed to help them understand the differences between investment advisers and brokers in terms of standards of care and methods of compensation.With the biggest regulatory change in investment advice... Read full post

Jun 22, 2018, 1:38 PM EST

Hillary Clinton would have saved the DOL fiduciary rule


By Mark Schoeff Jr.

By fall 2016, I had pretty much given up trying to get an answer from Donald J. Trump's presidential campaign about its position on the Labor Department's fiduciary rule.Then in October, I saw Anthony Scaramucci in the lobby of the Mayflower Hotel in Washington. Mr. Scaramucci had just moderated a panel at a securities conference I was covering. I knew Mr. Scaramucci was a fundraiser for Mr. Trump, so I sidled up to him and asked what the campaign thought of the DOL rule. He promised Mr. Trump would "repeal" it.Whatever, I thought. The chances of Mr. Trump being elected were remote, right? A couple weeks later, Mr. Trump stunned almost everyone by beating Democratic presidential nominee Hillary Clinton. Although Mr. Trump couldn't "repeal" the Obama-era DOL rule, it is now dead thanks to his administration's giving up the fight to protect it in court. On Thursday, the U.S. 5th Circuit Court of Appeals issued a mandate confirming its... Read full post

Jun 19, 2018, 5:43 PM EST

Should investment advisers be put on a pedestal when it comes to advice standards?


By Mark Schoeff Jr.

During the endless battle over investment advice standards, one thing has remained fairly consistent: Investment advisers hold the high ground.They are elevated as the paragon of care because they must meet a fiduciary standard and act in the best interests of their clients. Brokers are held to a suitability standard that often is described as less stringent because it allows them more leeway to recommend high-fee products that put money into their own pockets."Sometimes in the debate, to simplify it, you hear: Advisers good — brokers bad," Ira Hammerman, executive vice president and general counsel at the Securities Industry and Financial Markets Association, told members of the Securities and Exchange Commission's Investor Advisory Committee on June 14 in Atlanta.The IAC's agenda was dominated by the SEC's investment advice reform proposal, which is open for public comment until Aug. 7. Among other things, the proposal seeks... Read full post

Jun 1, 2018, 5:51 PM EST

5th Circuit mandate to vacate DOL fiduciary rule 'still pending'


By Mark Schoeff Jr.

As death watches go, the vigil over the Labor Department's fiduciary rule has been a long one.Back on March 15, the 5th Circuit Court of Appeals struck down the regulation in a 2-1 decision. The Department of Justice, on behalf of the DOL, declined to appeal the decision by the April 30 deadline. Attempts by AARP and three states to intervene as the defendants were denied on two different occasions in May.The court was originally supposed to issue a mandate by May 7 making the March 15 decision effective, but has not yet done so. When a pope passes away, a Vatican official pounds on his chest three times. If he doesn't respond, he's officially declared dead. If someone were to pound the DOL rule's chest three times today, the regulation would at least give a weak cough.The parts of the rule that were implemented almost a year ago — impartial conduct standards for brokers when working with clients in retirement accounts —... Read full post

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