Editor’s note: This article first appeared in Human Capital, a newsletter by Washington Bureau Chief Melanie Waddell about the people who shape the financial regulatory space.
This week’s Human Capital spotlights the chorus of industry practitioners who are calling on their fellow advisors to raise their voices and tell the Securities and Exchange Commission in “passionate and personal” comment letters how the agency’s current Regulation Best Interest (Reg BI) proposal must change.
The clock is ticking. The securities regulator will stop taking comments on its advice standard package, which includes Reg BI, on Aug. 7 — and MarketCounsel CEO Brian Hamburger doesn’t see that date being extended.
The group behind the “Raise Your Voice” Campaign — assembled by Institute for the Fiduciary Standard President Knut Rostad — includes advisors that have been on both sides of the fence (brokerage and fiduciary advice).
During a Wednesday press briefing, all of the Raise Your Voice participants said Reg BI must change.
The crux of the complaints: that “best interest” is not clearly defined in the SEC’s plan, the reg falls short of a true fiduciary standard, and the term “best interest” will further confuse an investing public about the true nature of fiduciary advice.
“This [Reg BI] is just regulation gone wrong,” said Sheryl Garrett, head of Garrett Financial Planning Network, which prides itself on giving advice to folks of all walks of life.
The group’s rallying cry is to spur advice professionals that have been non-fiduciaries and fiduciaries to come forward and say adhering to a fiduciary standard “has not hurt me in a business standpoint,” Garrett continued. “The argument about the [fiduciary standard] being so problematic and you can’t do business and it will make it impossible for middle income or people with more modest means to have access to a financial advisor – I call bull hockey to that.”