Those of you who are Mary Schapiro fans are one step closer to that I-told-you-so moment. Personally, I’ve been skeptical of the former FINRA CEO who’s now SEC Chair, but I have to admit, she’s starting to win me over.
Schapiro’s most recent home run came in a speech she gave on May 6. Although she’s not technically a politician, I’ve sometimes wondered whether the SEC Chair has a tendency to play to her audience–using that tried-and-true political technique of tailoring one’s remarks to at least sound like you believe what a particular group wants to hear. When she addressed a SIFMA compliance and legal seminar last Thursday, that was clearly not the case.
“Right now, investment advisors, as fiduciaries, have an obligation to provide advice that is in an investor’s best interest–and to avoid or disclose conflicts of interest,” Schapiro said. “Broker/dealers… do not currently have to meet this standard… I believe that broker/dealers and investment advisors providing the same services, especially to retail investors, should meet that same high fiduciary standard.”
Strong stuff; Especially to a group of SIFMA execs. Strong enough, in fact, to make me more optimistic about the House of Representatives’ version of financial reform bill. As you might remember, their bill includes an open-ended fiduciary duty for brokers, leaving its definition and application up to the SEC. With Ms. Schapiro at the Commission’s helm, that didn’t exactly make me warm and fuzzy. But she’s got me coming around.