Leading Groups File SEC Comment on “Best Interest” Standard
You can download this letter from leading consumer, civil rights, labor and older American organizations, including U.S. PIRG. It was filed as a comment describing our concerns with the SEC's proposed "Best Interest" standard intended to ensure that all individuals and firms offering investment advice act in a fiduciary capacity, or in the best interest of their clients.
You can download this letter from leading consumer (including U.S. PIRG), civil rights, labor and older American organizations. It was filed as a comment describing our concerns with the SEC’s proposed “Best Interest” standard intended to ensure that all broker-dealers and other individuals and firms offering investment advice act in a fiduciary capacity, or in the best interest of their investor-clients. Many transactions are subject to a lesser “suitability” standard. The Obama Administration Department of Labor had finalized a much stronger rule for retirement savers only. The current administration’s Labor Department delayed that rule long enough for industry opponents to find a court to overturn it. One of the special interest arguments was “Wait for the SEC.” This comment is in response to the SEC proposal.
Excerpt from our comment letter:
“The rule’s most significant failing is that it does not establish a clear uniform best interest standard, one that is no less stringent than that found in the Investment Advisers’ Act, for all professionals who provide investment advice to retail clients. Instead, it adopts a weaker standard for broker-dealers that falls short of a true best interest standard and does not adequately address the conflicts of interest that too often are permitted to taint broker-dealers’ recommendations. Worse, its interpretation of the Advisers Act fiduciary duty further puts individual investors at risk because it reflects these same weaknesses.”