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SEC Commissioners Warn Of Rushed Regulation

February 8, 2011 • Page 2 of 2

Creating rules "just for the sake of harmonizing" legal standards among brokers and investment advisers could prevent some registered investment advisors from getting into the business, Aguilar says. Most SEC-registered investment advisors are small businesses, and will continue to be even after some become subject to state regulation under the Dodd-Frank Act.

Casey and Troy Paredes, the commission's other Republican, together opposed the release last month of an SEC study calling for brokers to act as fiduciaries. "A stronger analytical and empirical foundation than provided by the study is required before regulatory steps are taken that would revamp how broker-dealers and investment advisors are regulated," they said.

Convincing legislators to give the agency more time to reflect on potential consequences could minimize the risk of making slipshod decisions.

However, it won't solve a larger problem that became another recurring theme on Friday--the agency's shortage of money. While Congress has given the SEC more work to do, it has held back much of the funding.

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13 years ago

The Financial Planning Coalition would like to point out that consumer protection can't come fast enough for Americans who have seen their savings devastated and their confidence shaken by the financial crisis. We strongly believe that the SEC must act on its own recommendation and should not delay in beginning the process of writing, proposing and ultimately adopting rules to extend a fiduciary standard of care to broker-dealers who provide personalized investment advice to their retail customers. Some critics of extending the fiduciary standard of care cite dubious claims that doing so will raise costs and prevent middle class Americans from accessing products and services. Yet, no proof of this has been offered. To the contrary, there are numerous business models that successfully incorporate a fiduciary standard and still give consumers a range of choices and advice with a wide array of fee structures. This is probably why a cross-section of financial services providers has come out in favor of a uniform fiduciary standard. The fact is that the fiduciary standard comes down to an adviser or planner putting the client's interest first. And who could be against that? Not many and certainly not consumers. In fact, a study we and other consumer advocate and industry groups conducted in 2010 showed that 97% of American investors agree that a fiduciary standard should apply to those people providing investment advice. The swift implementation of a fiduciary standard of care will ensure that consumers have the highest level of protection and that their legitimate expectations - that advisers put their interests first - are met. Sincerely, The Financial Planning Coalition, which comprises: Certified Financial Planner Board of Standards Financial Planning Association National Association of Personal Financial Advisors
cindis 13 years ago

"However, it won't solve a larger problem that became another recurring theme on Friday--the agency's shortage of money. While Congress has given the SEC more work to do, it has held back much of the funding."Yeah, sort of like us. We haven't been given any extra money to deal with this either. Note to SEC---welcome to our world.