Rulebook

Long Wait Ahead for Advisor Fiduciary Standard

RSS

There’s no question the continued regulatory uncertainly creates a huge challenge in running an advisory business.  Yet solving the biggest challenge—a uniform fiduciary standard—may be more than a year away.

The Financial Services Institute’s Dale Brown on Thursday predicted that advisors will not see rules around a fiduciary standard by the end of this year. In fact, he expects the industry will likely see the Department of Labor’s re-proposed rule by July, but that an SEC proposal in writing will likely arrive toward the end of 2014. “If we figure out the fiduciary standard, that resets the table in so many ways,” he added.

Brown’s prediction comes amid the House of Representatives scheduling a vote this week for a bill that aims to halt the DOL’s proposal until after the SEC has issued a proposal. Written by Ann Wagner, R-Mo., the legislation requires the DOL to wait 60 days to introduce its expected re-proposed rule on the definition of a fiduciary under ERISA until after the SEC adopts a fiduciary standard.

Looking past just the fiduciary standard, the industry will be in this uncertain regulatory environment for an extended period of time, Pershing’s chairman Brian Shea said Thursday in comments to attendees of the firm’s conference. “Financial reform goes far beyond the core causes of crisis,” he says.

“One commonsense set of standards would be helpful,” Shea said, but noted that the issue needs to be approached from a investor perspective, rather than from a regulator’s view.  Investors are not well served by competing rules, Shea says.

“We’re moving to a new place, and we need to serve our clients with their best interests first,” says Jim Crowley, Pershing’s chief relationship officer and a managing director. And the beset way to do that is together, with both input form both the industry and the regulators moving the discussion forward, he says. “It’s time to put down our bows and arrows.”

 

Please or Register to post comments.

What's Rulebook?

Compliance, regulatory and legal issues, with a fair amount of cops and robbers for fun.

Blog Archive
Investment Category Sponsor Links

 

Sponsored Introduction Continue on to (or wait seconds) ×