Clayton has contrasted the “episodic” nature of interactions between brokers and their clients with the more “holistic,” ongoing nature of RIA interactions with their clients. He has also pointed out that the broker business model is more commission-based and can involve practices such as principal trading and the sale of proprietary products.
NAPFA’s leadership disagrees. “Unfortunately, the SEC has not clearly defined 'best interest,' and the rule could instead weaken consumer protections as it does not hold brokers to a true fiduciary standard,” Brown said.
“As an organization whose members are all fiduciaries, we want to be crystal clear: ‘Best interest’ is not shorthand for fiduciary. The SEC’s proposal is misleading and confusing for consumers,” he added.