“We have work to do,” Clayton added, when asked when the proposal might be finalized. “Not next month or the month after that.”

“What’s sitting out there is a proposal, but it can be improved,” Clayton told investors. “It’s clear to us that the standard of conduct as it applies to broker-dealers is not where a reasonable investor expects it to be. When people deal with investment professionals, we believe that what they want to know that person is not taking advantage of them. You want to know that the law does not allow them to take advantage of you. They can’t put their interests in front of yours. I don’t think anyone up here believes the standard is where it needs to be."

“Second, when you go and meet with an investment professional and you have a 403(b) or 401(k) and you’ll be responsible for investing, when you go to that person they need to explain who they are, what their obligations are to you. I don’t feel that conversation is required [in the proposals] to take place in as clear and candid manner as it should,” Clayton said.

Clayton kicked off the roundtable—the first that reporters were allowed to attend—asking investors if they had any good or bad stories regarding their investment professionals that they’d like to share.

Several investors shared tales of persuasive salespeople who had met with them or their older parents to try to convince them to roll over their entire 403(b), 401(k) or federal employee thrift plan into variable annuities or, in one investor’s case, a fixed annuity.

SEC staffers said they are working on a customer relationship summary for variable annuities to educate investors about what their sales professional is selling and charging. However, staff admitted they have no authority over fixed annuities, which are regulated by state insurance commissioners, who have yet to finalize a national best-interest standard or customer disclosure form for insurance agents selling fixed annuities.

One investor suggested that when it comes to helping investors intelligently sort through broker and advisor fees, the SEC should follow the lead of the food industry which discloses calories for each and every product “so I can compare professional to professional. Some people are not comfortable asking, ‘How much do you make?’ But if they have a form that everyone gets that says, ‘Here are my fees,’ I can take that with me and compare. It changes the dynamic."

“I’ve been suggesting that,” SEC Commissioner Kara Stein said.

Clayton appears more circumspect about fee disclosure. “There are so many different kinds of products and charges, that’s hard to capture, but my objective is to get there over time,” added Clayton, who cited the benefits to investors from stepped-up mutual fund fee disclosures.

“We all agree with you and the benefits of that in the mutual fund industry that we’ve already had in terms of driving costs down in terms of competition. I can’t tell you how much money that actually puts back into clients’ pockets,” Clayton added.