With the House and Senate poised to hammer out a final version of financial services reforms, leaders of several of the largest family office advisors and family office associations are urging Congress to “Fight for All Investors and Put the Fiduciary Standard in Wall Street Reform.”
They have signed a Fiduciary Statement, and invite all investment advisors and broker/dealers “rendering financial or investment advice to sign the Fiduciary Statement by going to the Committee for the Fiduciary Standard’s website at www.thefiduciarystandard.org.” (This editor is a member of the Committee.)
These family office leaders join a group of Nobel Laureates and Wall Street leaders who signed the Fiduciary Statement in March. They believe that investment and financial advice given to all investors should be in the investors’ best interest under the fiduciary standard of care established by the Investment Advisers Act of 1940.
The House passed Wall Street reforms legislation in December requiring brokers who provide advice to retail investors to put the clients’ interests first under the fiduciary standard, as investment advisors must. The Senate’s version of reforms calls instead for the SEC to “study” whether brokers who provide investment advice “should be required to act in the clients’ best interest.” Currently brokers are not required to put their clients’ interests before their own or their firms’–under their suitability sales standard of conduct. Yet, most investors believe that the advice they are getting from brokers is in their interest–even though it is not required to be.
The family office leaders call for the fiduciary standard to apply to all investors who receive advice–whether millionaire or more modest investor.
“This is a matter of simple fairness. All families should be able to access the same high fiduciary standard of investment and financial advice that wealthy families can access. Why should smaller investors be left behind?” asked Maria Elena Lagomasino, CEO of GenSpring Family Offices, said in the announcement.
The family office leaders who signed the Fiduciary Statement include:
President, TAG Associates, LLC
Chairman, Greycourt & Company, Inc.
Founder and CEO, Family Office Exchange
Maria Elena Lagomasino
CEO, GenSpring Family Offices
President & CIO, Federal Street Advisors, Inc.