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February 07, 2013 at 11:24 AM
“The CFP Board’s Kevin Keller said he questioned the premise of the title,” Skip Schweiss began when reflecting on his regulatory panel at TD Ameritrade’s annual conference in San Diego last week. “We billed the session as 2013 being a year when a regulatory tsunami hits. Keller said the tsunami hit in 2010, and now we’re stuck in the mud left in its aftermath.”
Noting that regulatory issues seem to be “moving really slowly,” Schweiss, the company’s Washington advocacy director, told AdvisorOne on Wednesday that one of the main issues, the fiduciary standard, “really has two heads, the SEC’s rulemaking and the ERISA fiduciary rule from the Department of Labor.”
“We don’t see much from the SEC on this front due to turnover in the commission’s staff after the election,” he said. “But as Keller said, we’ve been staring at the SEC for so long we’ve sort of missed as an industry what’s been happening at the DOL. They are planning to re-propose their rule, probably this summer, and that will carve out $5 trillion in IRA assets.”
Schweiss noted that the regulatory environment was relaxed last summer in the run-up to the election, but is now “picking up” once again.
“No one wanted to rock the boat before the election; that is no longer the case,” he added.
As for what the SEC will look like under Mary Jo White, Schweiss demurred, saying it’s too early to tell, but “they have a lot of big issues with which to deal, such as the Volcker Rule and money fund regulation.”
Specifically referring to Dodd-Frank Section 913 that deals with the fiduciary issue, he pointed to the fact that the section required SEC only to study the issue, which it did.
“The commissioners didn’t sign off on the results of the study, even though the staff recommended it,” Schweiss said. “The important wording in Dodd-Frank was that a broker fiduciary rule must be consistent with what advisors have operated under. [Rep.] Barney Frank came along and said (and I’m paraphrasing), ‘Don’t you dare make it the [Investment Company Act of 1940].’”
