SEC's Schapiro Favors Single Standard for Securities Professionals

Lora Bentley

Regulators have been tossing about the idea of a single fiduciary standard for broker-dealers and investment advisers for a while now. In May, Financial Industry Regulatory Authority (FINRA) chief Richard Ketchum told InvestmentNews:

To the extent a broker-dealer is providing broad-based advice similar to what an investment adviser is doing, we would love to get to a single standard.

U.S. Securities and Exchange Commission Chair Mary Schapiro agrees, according to another InvestmentNews piece. However, Schapiro, who served as FINRA chief before taking the top spot at the SEC, reportedly told an audience at the Consumer Federation of America's financial services conference last week that the fiduciary duty should not be weakened just so it can be more broadly applied. She said:

Securities professionals, regardless of what their business card says, should be subject to the same standard of conduct, the same licensing and qualification requirements, the same disclosure obligations, the same regulatory and record-keeping standards, and a robust examination and oversight schedule.

Schapiro also acknowledged that the change would certainly prove "disruptive" for what InvestmentNews writer Sarah Hansard calls "entrenched interests." But the priority for Schapiro is not to make everyone involved happy. The priority is to better serve investors.


Nonetheless, the idea is still that at this point: just an idea. Until Schapiro and others decide exactly how to tackle it -- what the comparable regulatory standards should be, and who should oversee the efforts, for instance -- those "entrenched interests" can rest easy.

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