After President Obama in 2009 appointed Mary Schapiro to become the 29th chairman of the Securities and Exchange Commission, she hung a sign in her office with this message: "How does it help investors." This ethos – conceptually simple if often devilishly complex in its application – is the lens through which Schapiro views every agency task.
I interviewed Schapiro after she spoke at the annual seminar of the Securities Industry and Financial Markets Association (SIFMA) Compliance and Legal Society. In her keynote address, she underscored the SEC's mission to protect investors, while balancing the need to create an environment where financial institutions can operate efficiently and contribute to the growth of the U.S. economy....
Schapiro says that the nuances of suitability and fiduciary standards "puts investors in a terrible situation, where they are forced to parse out complicated legal concepts." As a result, she supports the fiduciary standard…which puts retail customers' interests first. But many of [SIFMA's] constituents are fighting hard to water down the definition in the name of preserving "customer choice of and access to financial products and services."
To wrap up, I asked Schapiro what questions investors should ask potential advisors or brokers. She encourages everyone to conduct background checks on the SEC and FINRA websites or the site of the North American Securities Administrators Association (a group of state-level securities regulators), as well as the Certified Financial Planner Board of Standards site. Read more >
March 21, 2012