Apparently, seven investor roundtables were not the charm for Securities and Exchange Commission Chairman Jay Clayton, who plans to seek yet more investor feedback on the agency’s controversial new financial professional conduct rules—known under the umbrella term “Regulation Best Interest.”
Chairman Clayton announced two more events for “Main Street investors” to be held in Boston on Monday, July 8.
The events follow seven investor roundtables the agency held over the past year before approving its controversial 1,400 pages of conduct rules for financial professionals on June 5. Investors at the first seven events overwhelmingly said the rules and disclosures—which are supposed to help them determine potentially costly differences between brokers and registered investment advisors—were too confusing to be helpful.
Consumer and fiduciary advocates are skeptical that two more investor events will make much difference now that the rules are final and become effective June 22, 2020. A consortium of pro-consumer groups paid for national testing of its own, which also found investors were routinely confused and misled by the SEC’s rules.
“Chairman Clayton is desperate to sell these rules as beneficial to investors, but it is a disservice to pretend they deliver protections they don’t,” said Barbara Roper, the director of investor protection at the Consumer Federation of America.
The rules, she said, “don’t require brokers or advisors to recommend investments and investment strategies that are best for the investor, and they leave most harmful practices untouched. If the chairman isn’t willing to acknowledge that, his roundtable will at best confuse and at worst mislead investors about where they can turn for advice they can trust.”
Chairman Clayton, however, persists.
“The commission has an important role to play when it comes to investor education, particularly when it comes to the critical decision of whom investors trust to assist them in securing their financial future,” Clayton said in a statement announcing the events.
“These events are intended to help Main Street investors better understand the key choices they have to make when deciding whether to work with a financial professional. I look forward to continuing the conversation I began with many Main Street investors at our roundtables last year,” Clayton said.
Clayton said the roundtable for investors is “part of the SEC’s ongoing investor education efforts.”