WASHINGTON BUREAU — The Consumer Federation of America (CFA) is urging members to tell the U.S. Securities and Exchange Commission (SEC) to impose tougher investment product sales rules.

Barbara Roper, director of investor protection at the CFA, Washington, says supporters of stronger investor protections need to stand up against insurance agents and others who oppose the creation of new standards.

The SEC has opened a 30-day comment period on the standard of care that should apply to sales of investment protects to consumers. The comment period ends Aug. 30.

Section 913 of the new Dodd-Frank Wall Street Reform and Consumer Protection Act requires the SEC to publish a study on the issue in 6 months.

The SEC has received and posted 1,175 comments on the issue. Most of the comments have been submitted by members of the National Association of Insurance and Financial Advisors, Falls Church, Va., who oppose efforts to apply a fiduciary standard of care to financial professionals who now use a suitability standard.

The fiduciary standard requires a representative to avoid conflicts of interest, put the client’s interests first, and disclose possible conflicts that may exist. A suitability standard requires a representative to verify that a product sold to a customer appears to suit the customer’s needs.

“We know that members of the industry, insurance agents in particular, are flooding the record with comments opposing any effort to make them act in their customers’ best interests when they recommend securities,” Roper said. “Only by speaking out can investors counteract that message.”

The SEC’s call for comments “is a golden opportunity to dramatically improve the protections that apply to investment advice and recommendations by members of the securities industry,” Roper said. “If investors find it hard to shop for investment advice, think the different legal standards that apply to brokers and investment advisers are confusing, and want those who provide them with investment advice and recommendations about securities to act in their best interests, they need to let the SEC know.”