Uniform Fiduciary Duty for Broker-Dealers and Investment Advisers

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Uniform Fiduciary Duty for Broker-Dealers and Investment Advisers

Mar 28, 2012
On March 28, 2012, CFP Board and a coalition of consumer and industry organizations – including the Consumer Federation of America, Fund Democracy, AARP, Financial Planning Association, Investment Adviser Association, and the National Association of Personal Financial Advisors – submitted a letter to the Securities and Exchange Commission (SEC) with a proposed roadmap for the development of rule that would establish a uniform fiduciary duty for broker-dealers and investment advisers. The letter proposed a compromise framework for the rulemaking that started with a framework proposed in by the Securities Industry and Financial Markets Association (SIFMA) in July 2011, highlighting areas of agreement with SIFMA's proposed framework and offering several alternatives. The coalition of organizations refuted the claim that imposition of the fiduciary duty would force brokers to abandon their commission-based compensation models and their transaction-based recommendations. They noted that the fiduciary duty is sufficiently flexible to be applied, consistent with Section 913 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the SEC Section 913 Study, to broker-dealer sales-related practices. The organizations further noted that their proposed approach would provide badly needed and long-overdue protections for individuals who receive investment advice without diminishing the availability of services to investors.

Read the Coalition’s letter (PDF, 291KB)
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