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Administration Plans Fiduciary Standard for Brokers

By Mark H. Astarita, Esq.

And it begins. A market crash, a major ponzi scheme, and new regulations. The Obama administration announced today that it will propose to establish a fiduciary duty for broker-dealers offering investment advice and harmonize the regulation of investment advisors and broker-dealers.The move is being praised by investment advisor organizations and by consumer groups, but the entire debate is something of a tempest in a teapot. Brokers are not fiduciaries when they act as brokers, but the distinction has, for the most part, been lost over the years, as brokers take a more advisory role in their relationship with their customers, and many brokers today offer advisory services to their customers.The interesting part of the announcement was FINRA's response...continue to full post

Full post as published by SECLaw.com on June 17, 2009 (boomark / email).