In letter to
The study – conducted by the
In its letter, the Coalition – which is comprised of Certified Financial Planner Board of Standards,
"The 'best interest of the customer' standard should be the key feature of any uniform fiduciary standard of care," the Coalition stated in its letter. "However, the
The Coalition reiterated its view that the current assumptions made by the
"We vigorously oppose such an approach, because it would have negative consequences for retail customers," said the Coalition, urging the
Other key points of the Coalition letter include:
RFI'sfocus on enhanced disclosure suggests that such disclosure is sufficient for fiduciary standard. While disclosure of conflicts of interests is a beneficial and important step, disclosure alone is not sufficient to discharge an adviser's fiduciary duty.
- The Coalition letter identifies specific issues with the
RFI'sassumptions and proposes an alternative set of assumptions for a uniform fiduciary standard consistent with Dodd-Frank and the Advisers Act.
- The alternative standards of conduct and approaches discussed in the
RFIare inconsistent with Section 913(g) of the Dodd-Frank Act.
SECshould address harmonization of investment adviser/broker-dealer rules after it adopts a uniform fiduciary standard of care: the two issues are conceptually distinct and should not be linked.
The research submitted as part of the comment letter also indicates that "applying a uniform fiduciary standard on broker-dealers will have little if any effect on the availability of advice to customers."
Those surveyed reported that broker-dealers who are already operating under the fiduciary standard "experience stronger asset growth, stronger revenue growth, and obtain a greater share of client assets than those that provide services primarily under a non-fiduciary model."
The research also revealed:
- A majority of brokers and advisers are already operating under a fiduciary standard.
- Those brokers and advisers agree that the standard should apply when giving advice to retail consumers and that requiring this client-first standard has very little impact in deciding whether to serve "mass market" clients.
- Conversion of fee-based brokerage accounts to fiduciary accounts shows that a fiduciary standard does not lead to increased costs or decreased services.
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