In a tense 3-1 vote, the SEC approved its controversial package of new retail advice rules today, along with an additional new interpretation of a law that appears to broaden brokers’ ability to offer advice without having to register as advisors.

The wide-spanning “package of improvements” called Regulation Best Interest was approved largely along party lines, with sole Democrat Commissioner Peter Jackson voting against the four new rules he lambasted, as he encouraged investors to continue “to seek out true fiduciary advice from financial professionals who have chosen to hold themselves to higher standards than those we've set today.”

Chairman Jay Clayton and commissioners Hester Peirce and Elias Roisman voted to approve the new standards impacting retail investors advice: a new standard for brokers (Regulation Best Interest); new summary disclosures (Form Customer Relationship Summary); new standards of conduct for investment advisors; and the brand new interpretation that appears to significantly broaden brokers’ “solely incidental” exemption for offering investors advice without being required to register as an investment advisor.

“I hoped to join my colleagues in announcing that the nation's investor protection agency has left no doubt that, in America, investors come first,” Jackson said.

“Sadly, I cannot say that," he continued. "Rather than requiring Wall Street to put investors first, today's rules retain a muddled standard that exposes millions of Americans to the costs of conflicted advice. Even worse, contrary to what Americans have heard for a generation, the commission today concludes that investment advisors are not true fiduciaries. Today's actions fail to arm Americans with the tools they need to survive the nation's retirement crisis. Accordingly, I respectfully dissent.”

Jackson faulted the commission for what he said was an inexplicable weakening of of the long-standing investment advisor fiduciary standard. “The final guidance the majority approves today removes language from last year's proposal stating that the law ‘requires an investment advisor to put its client's interests first.’... Thousands of advisers who have taken pride in putting clients first for decades will be surprised to learn that, all along, the SEC has had lower expectations for their work.”

Experts are still unpacking the more than 1,400 pages of new regulation.

“None of us have seen the language, but I think the proposed changes on investment advisor guidance and the solely incidental exemption will be bigger news over time than even Regulation Best Interest,” CFP Board CEO Kevin Keller told Financial Advisor magazine.

“I think it is a momentous day," he said. "We agree with Commissioner Jackson that investors should really seek out true fiduciary advice and adivisors who have chosen to hold themselves to a higher standard,” said Keller, whose organization oversees the conduct standards, licensing and ethics of 84,000 CFP certificants.

Keller said that the CFP Board came to a different conclusion than the SEC and found it is critical to pass “an unambiguous duty of loyalty and care to investors.”

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