WASHINGTON BUREAU — The Consumer Federation of America (CFA) says opponents of a uniform fiduciary standard have provided no evidence that a uniform standard would increase the cost of investment services.
Barbara Roper, director of investor protection at the CFA, Washington, is urging members of the House Financial Services Committee to let the U.S. Securities and Exchange Commission (SEC) proceed with making a rule that would apply a fiduciary standard on brokers as well as financial advisors.
“The SEC has proposed a way to move forward on fiduciary duty that maximizes investor protections while minimizing industry disruption,” Roper says in a letter sent to members of the committee.
The SEC “has won broad support from industry and investor advocates alike,” Roper says. “It would be tragic if opposition from a few industry members intent on maintaining the status quo were able to derail that progress. Despite the self-interested claims of certain industry members, it is the middle income investors who must make every dollar count who are most in need of these enhanced protections.”
A provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act requires the SEC to study the standard-of-care issue and gives the SEC the authority to develop new regulations in that area, if it chooses to do so.
Broker groups have long argued that imposing a uniform standard would increase brokers’ compliance costs and exposure to lawsuits and increase the amounts consumers must pay for help with investments.
In January, the SEC released a stand-of-care issue study that has drawn criticism from House Republicans and groups representing securities brokers.