To read the March 1, 2013 release of the SEC’s fiduciary questionnaire evokes the worst nightmare a university student could have. As industry thought leaders have opined, (see “Has SEC Unfairly Rigged Its Fiduciary Questionnaire?” FiduciaryNews.com, April 23, 2013), one must wonder if the whole thing is a sham – an elaborate political scam designed to shove aside the agency’s mandate to protect investors in favor of Wall Street’s vast oceans of potential political donations.
The problem centers on the nature and apparent bias of the document – titled “Duties of Brokers, Dealers, and Investment Advisers” – itself. First, coming in at 72 pages, its heft alone is enough to intimidate even the most experienced fiduciary advocate. Second, it comes across like one of those college tests you have nightmares about (you know, the ones where you’re dreaming you oversleep before the final, rush to the exam in your pajamas only to find the questions are written in some obscure Sanskrit dialect. Oh, yeah – and it’s a math test).
See also: An advisor’s code of ethics
Here’s an example of what the SEC is asking for (from Part III E. 1.b. on page 44-45):
Provide data and other information describing the likely benefits and costs for firms and retail customers from firms engaging in these activities under the uniform fiduciary standard of conduct and each of the alternative approaches discussed above. In particular, describe the cost to broker-dealers and investment advisers in terms of dollars and time spent from providing these activities to retail customers under the uniform fiduciary standard and each of the alternative approaches. Also provide data and other information describing the benefits and costs to firms and retail customers likely to result from voluntary actions firms may take that are not necessarily mandated by the relevant standard. If possible, separate costs by service type, and differentiate by retail customer demographic and account information.