Timing of SEC’s Fiduciary Rule Debated at CFA Conference

While optimism remains that the Securities and Exchange Commission will issue a rule putting brokers under a fiduciary mandate, the question being debated among industry and consumer officials is exactly when it will happen.

“The industry wants [a fiduciary rule] done, it’s the right thing to do. I still think it will happen,” Ken Bentsen, executive VP of public policy and advocacy at the Securities Industry and Financial Markets Association (SIFMA), told attendees at the Consumer Federation of America’s (CFA) financial services conference in Washington on Thursday.

“Unfortunately, the SEC staff is having to do a lot more work to get this rule out,” added Lawranne Stewart, deputy chief counsel in Rep. Barney Frank’s office at the House Financial Services Committee, who sat on a panel with Bentsen to discuss the future of securities regulation. “I think in the end they will” get a rule done, she said. “Hopefully we’ll see something soon.”

However, Barbara Roper (left), director of investor protection for CFA, who was also a member of the panel, said she believed the SEC was “paralyzed” in moving forward on a fiduciary rule by a small portion of the broker-dealer community “dependent on variable annuity” sales who said “they would challenge a [fiduciary] rule proposal in court.” While there is “broad consensus” that this fiduciary rule should move forward, Roper said, “it seems almost impossible to make progress. We hope by sometime next year we’ll see something but don’t bet the farm.”