Fiduciary Duty for All Brokers Coming Soon Says White

March 17, 2015

Mary Jo White, Chair of the Securities and Exchange Commission (SEC) announced today that the agency will "implement a uniform fiduciary duty for broker-dealers and investment advisors where the standard is to act in the best interest of the investor." At a recent speech at AARP, President Barak Obama spoke of protecting workers and retirees from receiving financial advice from broker-dealers who charge hidden fees and get kickbacks for selling unsuitable investments. He spoke specifically about protecting retirement accounts, adding that the Department of Labor will be re-proposing a rule requiring higher investment advice standards for brokers handing retirement accounts.

Ms. White's long-awaited statement was welcomed by proponents of strengthening standards for broker-dealers who, unlike investment advisors, are not required to put the best interests of their clients above their own. Her stance breaks the tie on the SEC's 5-person panel between the two Democrats who support uniform fiduciary duty, and the two Republicans who oppose it. In her remarks before a Securities Industry and Financial Markets Association in Phoenix, Ms. White did not give a timeline for when the rule would be proposed, but said her next steps were to meet with the other SEC commissioners to have in-depth conversations about how it would be outlined.