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Industry Spotlight > Women in Wealth

The Fiduciary Issue

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In a Wealth Manager Webinar on October 7, SIFMA’s Kevin Carroll and The Committee for the Fiduciary Standard’s Knut A. Rostad had a spirited discussion of important differences between the broker/dealer association’s proposed “federal fiduciary standard” and the “authentic fiduciary standard” already established in law–eight centuries of common law–that applies to investment advisors.

Kevin Carroll is a managing director and associate general counsel at SIFMA–the Securities Industry and Financial Markets Association. He is the staff advisor to SIFMA’s Litigation Advisory, Arbitration, and Private Client Legal Committees. Carroll was an assistant director in the Enforcement Department of NASD, now FINRA, before he joined SIFMA.

Knut A. Rostad is the regulatory and compliance officer at the RIA Rembert Pendleton Jackson (RPJ), and chairman of The Committee for the Fiduciary Standard. As a contributing editor to Wealth Manager, Rostad writes the Regulatory Reason blog.

A recording of the Webinar is available here.

While on the surface some characteristics of the two standards may sound alike, there are very important and stark differences between what SIFMA is proposing as “fiduciary” on behalf of its broker/dealer constituents, and what is currently the fiduciary duty required of investment advisors by the Investment Advisers act of 1940 and subsequent court rulings.

House Hearing on Oct. 6

There was a Full Committee Hearing by the House Committee on Financial Services on Capital Markets Regulatory Reform: Strengthening Investor Protection, Enhancing Oversight of Private Pools of Capital, and Creating a National Insurance Office, on October 6th. The panel on Strengthening Investor Protection consisted of (with links to their testimony):

Ms. Denise Voigt Crawford, Texas Securities Commissioner, Securities Administrators Board, on behalf of North American Securities Administrators Association

Mr. Richard Ketchum, Chairman and CEO, Financial Industry Regulatory Authority [FINRA]

Mr. Mercer E. Bullard, Founder and President, Fund Democracy, Inc.

Mr. John Taft, Head of Wealth Management, RBC Wealth Management, on behalf of Securities Industry and Financial Markets Association [SIFMA]

Mr. David G. Tittsworth, Executive Director, Investment Adviser Association

Mr. Bruce W. Maisel, Vice President and Managing Counsel, General Counsel’s Office, Thrivent Financial for Lutherans, on behalf of the American Council of Life Insurers [ACLI],” according to the House Committee on Financial Services Web site.

Additional links:
Proposed Investor Protection Act (October 1, 2009)
SIFMA’s prior Testimony
SEC’s Rand Report: “nvestor and Industry Perspectives on Investment Advisers and Broker-Dealers”
SEC Chairman Mary L. Schapiro speech on September 24, 2009.

Comments? Please send them to [email protected]. Kate McBride is editor in chief of Wealth Manager and a member of The Committee for the Fiduciary Standard.


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