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An irreverent Wall Street Blogby Bill Singer
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Coalition Accuses Brokers and Insurance Agents of Spreading Misinformation
Written: January 13, 2010
The other day I read a sharp-edged and tartly worded document from, of all places, an apparent coalition of
- the North American Securities Administrators Association (NASAA),
- the Consumer Federation of America,
- the Certified Financial Planner Board of Standards, Inc.,
- the Financial Planning Association,
- Fund Democracy,
- the Investment Adviser Association, and
- the National Association of Financial Planners Association.
Not exactly the rabble of Wall Street. The title of their position paper says it all:
There They Go Again: Brokers and Insurance Agents Are Spreading Misinformation About the Senate Regulatory Reform Bill's Fiduciary Requirement for Investment Advice.
Wow --- and they say that I don't pull my punches?
In case you haven't heard, there is a nasty fight brewing between
- the broker-dealer community and the financial planning/investment advisers community;
- those espousing the historic Fiduciary Standard and those clinging to the Suitability Standard; and
- FINRA (and its allies, most notably SIFMA) and the Financial Planning Coalition (the CFP Board, FPA, and NAPFA).
This is not just a minor tiff between competing industry interests but a fight for the future of Wall Street. Much is at stake. It may well be a fight to the death.
While a number of salvos have already been lobbed back and forth in this war, the signatories to the There They Go Again memorandum have raised the pyrotechnics up a notch. Consider this excerpt, an in-your-face haymaker at FINRA:
Myth: FINRA should be recognized as the SRO for investment advisers in order to eliminate the regulatory gap that led to its failure to detect the Madoff Ponzi scheme.
Fact: FINRA cannot credibly claim to have missed the Madoff Ponzi scheme because it lacked jurisdiction over Madoff’s investment adviser operations. On the contrary, there was no Madoff investment adviser operation until 2006. . .
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