7/01/2010

SEC WILL IMPOSE FIDUCIARY STANDARD ON BROKERS: BARNEY FRANK


US Congressman Barney Frank makes prediction moments before House passes financial-reform bill; Senate up next

The overhaul of the U.S. financial system took a big step toward becoming law Wednesday evening when the House passed reform legislation 237-192. As a result, it's also looking more likely that brokers may soon be held to the same standard of care as investment advisers.

Indeed, just before the House vote, Rep. Barney Frank, D-Mass., highlighted the fiduciary duty section of the bill — a proposal Mr. Frank championed during two weeks of House-Senate negotiations on the final legislation.

The bill empowers the Securities and Exchange Commission to impose the same fiduciary duty on broker-dealers and insurance agents currently met by investment advisers. If the regulator chooses, it can require anyone providing personalized investment advice to retail clients to act in the client's best interests and to disclose any conflicts of interest.


Read entire article:

http://www.investmentnews.com/article/20100701/FREE/100709995/-1/INDaily01

Mark Schoeff Jr
Investment News
July 1, 2010

2 comments:

Dan Zwicker said...

Are the brokers free to act as fiduciaries given the conflict of interest inherent in the sale of any product?

Dan Zwicker said...

The standard implicit in a fiduciary duty to a client is a fee for service professional practice. The promotion and sale of products does not qualify under this standard.