“Past actions, and inaction, by the Commission have permitted broker-dealers to misrepresent themselves to the public as advisors without requiring them to meet the fiduciary standard that is appropriate to that role, and unsuspecting investors have been harmed as a result,” the group warned.
“American investors deserve to have their interests put first and adoption of a uniform fiduciary standard would immeasurably improve investor protection. Investors should not have to wait any longer to get the protection they expect and deserve,” the organizations said.
In the letter, the organizations laid out the elements that an economic analysis must have in order to be a good foundation for a fiduciary rule. Included in those elements are an accurate depiction of the differences between the suitability standard that applies to sales recommendations and the fiduciary duty that applies to investment advice.
Also, it must correctly identify the harm that is caused to investors because of a lack of a fiduciary rule.
“Appropriate economic analysis has the potential to promote more effective regulation. It will only achieve this goal, however, if it is based on a clear understanding of the problem regulation is intended to address, it accurately assesses the causes of that problem, and it fairly assesses the likely effectiveness of various possible regulatory approaches in addressing that problem,” the letter concludes.