As the nation’s top bank CEOs took their drubbings from members of the Financial Crisis Inquiry Commission (FCIC) in Washington on January 13, on the causes of the financial crisis, at least one of the CEOs spoke out in favor of a fiduciary standard for broker/dealers.
Lloyd Blankfein, chairman and CEO of Goldman Sachs, told members of the FCIC in his testimony that Goldman does “support the extension of a fiduciary standard to broker/dealer registered representatives who provide advice to retail investors. The fiduciary standard puts the interests of the client first. The advice-giving functions of brokers who work with investors have become similar to that of investment advisers.” But, he continued, “investors may not understand that the person they are getting advice from may be regulated under different rules and regulations. Retail investors should be able to expect the same duty of care when they are receiving investment advice.”
Blankfein also said that while Goldman had not officially taken a position on the Consumer Financial Protection Agency–one of the main sticking points in the Senate’s financial services reform bill–the investment bank agrees “that a more specific focus on consumer protection, whether in the context of a new agency or otherwise, is warranted.”