While broker-dealers and investment advisers may treat their clients differently, SEC Chairman Mary Schapiro believes all securities professionals should be subject to the same fiduciary duty.
Speaking at the Consumer Federation of America's annual financial services conference Dec. 3, Schapiro took issue with the different set of standards for investment professionals.
"If it's a broker-dealer, he's sold a product that is, 'suitable' for him. If it's an investment adviser, he gets treated under a higher standard-he fiduciary duty standard-meaning that the investment adviser has to provide advice that puts the investor's interest first," Schapiro said.
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Securities professionals, "regardless of what their business card says," should be subject to the same standard of conduct, the same licensing and qualification requirements, the same disclosure obligations, the same regulatory and recordkeeping standards and a robust examination and oversight schedule, Schapiro proposed.
"This approach may disrupt a number of entrenched interests. But, we are doing no service to retail investors by continuing with a distinctly different regulatory approach for professionals who perform virtually the same or similar services."
Schapiro praised Congress and President Obama's administration for moving the SEC toward a unified fiduciary standard.
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