Featured Stories

5 responses to “Has SEC Unfairly Rigged Its Fiduciary Questionnaire?”

  1. Michael Prus


    Excellent insights as always. Thank you.


  2. BPP401k.com Newsletter 05.01.13 Benefit Plans Plus 401k

    […] Has SEC Unfairly Rigged Its Fiduciary Questionnaire? Three highly regarded industry thought leaders attacked the SEC’s recently published Fiduciary Questionnaire during a keynote presentation before 600 attendees at the fi360 Annual Conference in San Diego. According to the experts, this effort had SEC fail written all over it from the get-to. Source: Fiduciarynews.com […]

  3. Barbara Roper

    While we share many of these concerns about the direction of the SEC’s request for information, it is important to recognize that the agency’s focus on quantifiable costs is the direct result of forces beyond the agency’s control. The courts set a very high bar for the economic analysis the agency must perform to justify its rules, a standard that has tripped the agency up on in several recent cases. Given that elements of the broker-dealer community might challenge a rule (particularly a strong rule) and that the two Republican commissioners at the time the SEC issued its Section 913 study dissented on the grounds that the Commission had not proven the need for rulemaking or adequately assessed the potential economic impact, the SEC would be remiss to try to proceed with rulemaking without first conducting additional economic analysis.

    Unfortunately, as this request for information makes clear, when industry is able to wield this threat of legal challenge, it generally doesn’t even have to go to court to achieve its goal of weakening regulation. The SEC does the industry lobbyists’ work for them by adopting a weak and ineffective regulatory approach.

    The question is whether this process can still be turned around to produce a strong fiduciary rule. For that to happen, we need to seize this opportunity to provide data that shows that a fiduciary duty for brokers is both needed and workable, or that an alternative regulatory approach exists that could deliver the same benefits. Any data that advisers can provide to show that brokers’ lack of a fiduciary standard does real harm to investors (as distinct from harm caused by brokers who violate the suitability standard) and that it is possible to provide fiduciary services in an affordable fashion would advance that goal. At the same time, fiduciary advocates must also push back against an interpretation of fiduciary duty in the SEC request that lacks key elements of an appropriate standard.

    Tempting as it is to attack the process, that would be a better use of this opportunity.

  4. Uniform fiduciary standard for broker-dealers and investment advisers? Proceed with caution! | The Securities Edge

    […] right balance between increased investor protection and costs for investors.  While the SEC’s fact gathering exercise has its critics,  the SEC’s commitment to conduct an extensive cost-benefit analysis is a positive sign that the […]

Leave a Reply

If you'd like to receive occasional updates from Fiduciary News, please complete the form below. We will never share your information with any other party, and you can unsubscribe at any time.
* indicates required

Are you doing everything you can to reduce your fiduciary liability?

FiduciaryNews provides essential information, blunt commentary and practical examples for ERISA/401k fiduciaries, individual trustees and professional fiduciaries. Our chief contributor is Chris Carosa.

Follow us on Twitter and join our LinkedIn group. You can also subscribe to our RSS feed.
Find us on FacebookSubscribe to our email newsletterSubscribe to our RSS feed
The Thought Leader Express - coming soon!

FiduciaryNews is sponsored by…


The 401(k) Fiduciary Solutions Book

Order your copy of the book now