“When you gloss over the differences between RIAs and brokers, then investors might not realize that only advisors’ fiduciary duty covers the entire relationship, while a broker-dealer’s duty is transaction by transaction,” Barr said.
SEC officials maintained during deliberations about Reg BI that they did not want to approve a uniform fiduciary rule for all financial professionals out of concern it would limit transaction-based advice, which might be a better fit for some investors, she added. The SEC did not respond to a request for a comment.
Only six of 30 RIA firms with assets between $1 billion and $3 billion used the word "fiduciary" in their 2021 summaries and only two of the six described what it meant, according to a survey conducted by The Institute for the Fiduciary Standard in December.
Jeff Lang, a securities industry attorney with Stark and Stark law firm, said last week at an institute press conference that the latest SEC guidance will continue having a chilling effect on advisors “who don’t want to be part of a sweep, if the information is not considered acceptable. No one wants to be that test case.”