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September 01, 2015 at 11:34 AM
Today marks the beginning of Fiduciary September 2015, the month declared four years ago by the Institute for the Fiduciary Standard as a time to commemorate why fiduciary duties in financial advice matter so much to the markets and investors.
Fiduciary September 2015 events begin September 10 and run through Sept. 30 (more information can be found on the Institute’s website):
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- A webinar addressing key fiduciary ‘Best Practices’ is slated for September 10.
- The Frankel Fiduciary Prize award will be given at a luncheon in Boston Sept 18.
- A webinar on the key provisions of the DOL BICE requirements is on Sept 23.
- Knut A. Rostad will speak in New York at a NYSSA symposium Sept 25.
- The Institute’s final Best Practices will be introduced at a New York media briefing Sept 30.
This year may well become as historic as was 1940. In 1940 the Advisers Act affirmed that fiduciary advice was crucial to the markets and investors. In 2015 regulatory inaction and industry-regulator skirmishes reveal by contrast a growing acceptance of “business model neutrality” as crucial to the markets and investors.
This transformation is a simple reversal of core priorities.
In 2015 the cement around SEC inaction on uniform standard rulemaking has hardened. At the same time, SEC administrative decisions defining fiduciary loyalty as disclosure, in handling conflicts of interest, as opposed to avoiding or truly mitigating and assessing harms, have also mounted. The issue today is not whether the client’s best interest is served; the issue is whether a conflict is disclosed.
In 2015 the DOL’s Conflict of Interest Rule has reached a crescendo, despite overwhelming industry opposition. While posturing is a Washington art form and announcing “acceptable” terms a violation of Negotiations 101, one has to wonder if industry opponents and their incessant repetition of the words “unworkable” and “choice” will be effective in rallying their troops. We’ll also learn if the financial services industry has dodged any fallout from the larger summer of political discontent.
