In a letter to Securities and Exchange Commission (SEC) Chairman Jay Clayton, CFA responds to a number of financial firms, trade groups, and industry lobbyists that have submitted comments to the SEC outlining a proposed regulatory approach for revising the standard of conduct for broker-dealers that could win their support. A careful review of these letters makes clear, however, that even where they adopt the nomenclature of a fiduciary duty, these groups continue to push for a watered down suitability-and-disclosure-based standard that will not provide the protections that investors both want and need. If the Commission were to adopt their suggested regulatory framework, it would offer the appearance, but not the reality, of enhanced protections for non-retirement accounts while badly undermining existing protections for retirement accounts. This letter is intended to identify the flaws in these groups’ proposed approach and the changes that would be needed to turn their framework into one that would truly put investors’ interests first.
