Don’t look for the SEC to follow the Department of Labor’s lead and come up with its own fiduciary rule anytime soon.
Despite reports that the agency plans to issue a fiduciary proposal next spring, that looks unlikely to happen with a new administration and probably a new SEC chair taking over next year, said Skip Schweiss, managing director of advisor advocacy and industry affairs for TD Ameritrade Institutional.
That was the feedback from recent meetings with “well-placed people” in Congress and the SEC, Schweiss told advisors Thursday at TD Ameritrade’s Elite LINC conference in Laguna Niguel, Calif.
The difficulty of crafting a fiduciary standard that encompasses all business models—and the inevitable politics of getting something done—have kept the SEC from acting in the six years since Dodd-Frank authorized the agency to create a standard.
“What you saw the DOL do is tackle that complication and find a way through it,” Schweiss said in an interview.
“So whether the SEC takes a cue from [the DOL rule], uses it as a roadmap, or ignores it, is anyone’s guess,” he said.
Separately, the agency is likely to propose a plan next year to require third-party exams of RIA firms, Schweiss told advisors. What types of auditing firms will qualify to conduct the exams is unknown, but Schweiss anticipates an exam cycle every three to four years.
Schweiss also warned advisors about pending (but little-noticed) anti-money laundering (AML) rules that look set to go into effect sometime next year. The rules will require advisors to report on a range of suspicious and fraudulent transactions.
The conference devoted a separate session to the new AML rules.
Fittingly, the event concluded Thursday with an update on the DOL rule, which continues to be a big topic of discussion among advisors.