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December 04, 2009 at 07:00 PM
The head of the U.S. Securities and Exchange Commission says financial professionals should provide investors with clear information about their compensation as well as about the products they sell.
Broker-dealers and other producers should tell clients at the point of sale “about the compensation the professional will receive on each product being sold–and information about the conflicts that may be causing the advisor or salesman to steer the investor to a certain investment,” said Mary L. Schapiro, SEC chairman, in a speech yesterday to the Consumer Federation of America. Washington.
When dealing with financial professionals, comparative shopping is not easy for consumers, she said.
“In my mind, this should not be the case,” she added. “I believe retail investors should be provided clear, simple, meaningful disclosure at the time they are making an investment decision–disclosure that includes comprehensible and comparable information about the securities products and services being offered.
“It also should include information about the compensation the professional will receive on each product being sold — and information about the conflicts that may be causing the advisor or salesman to steer the investor to a certain investment,” she said.
