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SIFMA Launches Investor First Initiative; CEO Gregg Says SEC Should Go First on Fiduciary

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The Securities Industry and Financial Markets Association announced Thursday the launch of its “Our Partnership with You” initiative, which is designed to help investors “get the most” out of their relationship with their advisor and highlights the fact that “both parties have responsibilities to one another.”

The initiative, which is part of SIFMA’s new broader investor-first initiative, “is all part of our commitment to fostering prosperity and helping Americans realize their financial goals, to fund their dreams and to use capital to fuel the growth of our country,” said Judd Gregg, SIFMA’s CEO, during a speech at The National Press Club in Washington.

“A strong relationship between individual investors and the financial industry is essential to helping investors achieve their financial goals,” said the former Republican senator from New Hampshire. “The financial services industry is dedicated to putting customers first through initiatives which protect investor choice, support investor education and enhance retirement savings.”

Gregg encouraged investors to “go and meet your advisor and get comfortable with them,” as “the advisor is there to help you in an area where you don’t have the expertise.” But, he warned, “go to someone who’s a true professional…and is on the side of the customer.”

SIFMA is encouraging its membership to share its “Our Partnership with You” document in their communications with clients.

The document outlines steps investors should take to inform and educate themselves, keep accounts current and use the right resources. “This means investors should read carefully all documents before making an investment decision, review the materials provided by their investment firm and ask questions as they arise. Investors should consider their investment options and be sure to ask questions and fully understand the choices,” the document states.

Chet Helck, SIFMA chairman and CEO of Raymond James Global Private Client Group, said at the event that Raymond James has “long had a similar document that helps to establish a strong foundation for the relationship between a financial advisor and his or her client.” Said Helck: “It’s the start of open dialogue and clear expectations, both of which build trust and are critical in helping clients determine their financial goals, then reach them through appropriate investments.”

Gregg also noted during his comments that he believes there has been a “piling on” of regulations. “We have received 15 million words under Dodd-Frank,” he said.

When asked if there should be less regulation, Gregg replied: “We’re not talking about less, we’re talking about rational regulation that accomplishes the purpose. Find the purpose first and then try to solve it.”

He said one regulation that had “gone too far” was the Department of Labor’s initial proposal in 2010 to change the definition of fiduciary under the Employee Retirement Income Security Act. DOL’s proposal “would have forced out of the business of giving advice a lot of the industry, and the loser would have been the consumer,” Gregg said.

Gregg said he supported the House’s recent passage of H.R. 2374, the Retail Investor Protection Act, introduced by Rep. Ann Wagner, R-Mo., which would require the DOL to wait to repropose its fiduciary rule until 60 days after the Securities and Exchange Commission issues its fiduciary proposal under Section 913 of the Dodd-Frank Act.

Under Dodd-Frank, Gregg said, “that’s the proper approach,” that the “SEC should take primary responsibility” in crafting a fiduciary rule first.

But as a Senate Democratic aide told ThinkAdvisor after House passage of the Wagner bill, the Senate Banking Committee has “no interest” in taking up such legislation.

Phyllis Borzi, assistant secretary of Labor for the Employee Benefits Security Administration, said at a recent conference that the DOL is “coming very close to finishing our work” on the reproposed rule. The “conflicts of interest rule,” she continued, is DOL’s “highest priority.”

Check out SIFMA and Main Street Take Center Stage: Chet Helck’s Legacy? on ThinkAdvisor.


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