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IA 25 2014: The Regulators and Advocates—Slideshow

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Regulators are always prominent on the IA 25 and likely always will be. After all, who’s more influential than the people crafting the laws advisors and brokers have to work by?

Indeed, regulation has been a top concern for advisors and their partners for many years. That makes the work of advocates like Knut Rostad or Skip Schweiss all the more important, as the industry looks for a conclusion to regulatory uncertainty.

Click through the following slides to learn more about the regulators and advocates affecting the industry. Check out the full schedule of all our upcoming IA 25 content here.

Mary Jo White, Chairwoman, Securities and Exchange CommissionMary Jo White

Chairwoman, Securities and Exchange Commission

Brokers are still waiting to hear if they will be put under a fiduciary mandate similar to the one advisors abide by, and White has said that this is the year the waiting will end.

“There are a number of ways” to impose a uniform standard, she told Washington Bureau Chief Melanie Waddell in April for the IA 25, however, she said she’s still compiling a list of possible options from SEC staff.

The priority, she said, “is to get those [staff] recommendations before the commission on what I consider to be a very high priority issue for investors.”

White said she believes investors do not understand the difference between a broker and an advisor. “I think the data certainly shows that, that there is that investor confusion,” she said.

(Photo: Getty Images)

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Andrew Ceresney, Director, SEC Enforcement DivisionAndrew Ceresney

Director, SEC Enforcement Division

Ceresney says keeping up with the increased complexity of wrongdoing is among the biggest challenges for the enforcement division at the SEC.

“Over time as matters have become more complex, we’ve been bringing on more industry experts, and we’ve gotten smarter about using technology,” he told Washington Bureau Chief Melanie Waddell in April for the IA 25.

He said the SEC is litigating more cases than it has in the past, but acknowledged that the funding boost proposed in President Barack Obama’s 2015 budget would allow the agency to take up more complex cases.

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Thomas Perez, Labor Secretary, Department of LaborThomas Perez

Labor Secretary, Department of Labor

Since he was confirmed in July 2013, Perez has slowed down the DOL’s move to repropose a definition of fiduciary under ERISA in order to gather more input from lawmakers and others in the industry.

We were unable to speak with Perez, but Knut Rostad, president of the Institute for the Fiduciary Standard, told Melanie Waddell that Perez “spoke to pro-fiduciary groups and started his rounds on the Hill to hear the concerns of lawmakers directly” as soon as he took office.

Perez acknowledged in a mid-April Senate Appropriations subcommittee that DOL has “been engaged in a significant amount of outreach” in order to “listen and learn from everyone.”

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Director of Investor Protection, Consumer Federation of AmericaBarbara Roper

Barbara Roper, Director of Investor Protection, Consumer Federation of America

One would think that “the near destruction of the global economy” would have ended the regulation/no regulation debate, according to Roper.

However, when it comes to our country’s financial system, nothing has changed, despite a series of successive disasters: the bursting of the tech-stock bubble, the accounting and analyst scandals, the mutual fund scandals and finally, the devastating financial crisis.

Today, many investors who were badly burned in the crisis are still reluctant to get back into the markets. Cultivating their trust is of the greatest importance, something advisors are doing a stellar job of, but that doesn’t replace macro, system-wide financial sector reform and regulation.

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Knut Rostad, President/Founder, The Fiduciary InstituteKnut Rostad

President/Founder, The Fiduciary Institute

If you want to know about the fiduciary standard, Knut Rostad’s your guy. Off the top of his head he’ll rattle off details on the Advisers Act, on past SEC rulings, on the history of fiduciary, on the dynamics within the Committee for the Fiduciary Standard or the Institute for the Fiduciary Standard, both of which he founded. He’ll give you informed insight into what the prospects are inside the Beltway for new fiduciary rules from the Department of Labor or the SEC.

He’s not optimistic about the direction the SEC is going. “It may not be in the investors’ best interest that the SEC continue with its rulemaking; it’s not a good direction for investors,” he told us.

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Skip Schweiss, President, TD Ameritrade Trust Company; Managing Director, Advisor Advocacy and Industry Affairs, TD Ameritrade InstitutionalSkip Schweiss

President, TD Ameritrade Trust Company; Managing Director, Advisor Advocacy and Industry Affairs, TD Ameritrade Institutional

Skip Schweiss knows advisors. Skip Schweiss knows retirement. Skip Schweiss knows Washington. Skip Schweiss knows fiduciary. He also has a long title that reflects that knowledge—president, TD Ameritrade Trust Company, and managing director, advisor advocacy and industry affairs at TD Ameritrade Institutional—along with deep experience and insights on all those topics.

So we asked him whether this could be a pivotal year for rulemaking on the fiduciary standard and redefinition at the SEC and the DOL. “I could spend an hour answering that question,” he said. When he gets “questions on the fiduciary standard from advisors, I say it’s like the duck going across the pond: On the surface, nothing seems to be going on, but underneath there’s a lot of action, though right now there’s no movement.”

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Janet Yellen, Chair, Federal ReserveJanet Yellen

Chair, Federal Reserve

Regardless of who holds the position, the Federal Reserve chairman always plays an influential role in the financial services industry, for both investors and savers. But Janet Yellen, the first woman to serve as the chair of the Fed Board of Governors, arrived in office just as the Fed was beginning to tighten the quantitative easing spigot.

Some have wondered, however, if Yellen’s tenure will simply be a continuation of her predecessor’s.

She said as much in her semiannual monetary policy report before the House Committee on Financial Services in early February, pledging to continue former Chairman Ben Bernanke’s work and emphasizing that she expects “a great deal of continuity in the FOMC’s approach to monetary policy.”

(Photo: Martin Klimek/ZUMA Press/Corbis)

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