The Practice Blog: A Focus on Dodd-Frank and Fiduciary at D.C. Gathering

The fiduciary duty debate was, not surprisingly, a point of discussion. One of the important questions in the debate of fiduciary versus suitability, said Jim Angel, a professor at Georgetown University who specializes in the structure and regulation of financial markets, is “What is the nature of the product that you’re selling?” Angel was supportive of a fiduciary duty for brokers, and he went on to say that “the disclosure of the nature of the relationship [between the advisor and the client] is essential, and the relationship should determine the standard” the advisor/broker adheres to. Campos told me after his public remarks that he believes the SEC will put brokers under a fiduciary standard.

Alex Pollock, a resident fellow at the American Enterprise Institute (AEI) in Washington, pointed to what he said is a major “loophole” in Dodd-Frank–the reforming of Fannie Mae and Freddie Mac is not addressed in the legislation.

Michael Farr, president of the law firm Farr, Miller & Washington in Washington, echoed the same exasperation that we’ve heard many times since Dodd-Frank’s passage: What consequences will we see from so many rules that have yet to be written? Farr also predicted that the Consumer Financial Protection Bureau’s (CFPB) ultimate mandate to require “a much higher standard to borrow” will not help the economy, and that the housing market has further to fall. But regulatory reform, he opined, will have a positive affect on banks over the long term.