One Step Closer to a Fiduciary Duty for Broker-Dealers?

More than two years after an SEC Staff study recommended adoption of a uniform fiduciary standard for broker-dealers and investment advisers, the SEC has taken its first significant step towards possible implementation of the recommendation. On March 1, 2013, the SEC issued a public release seeking quantitative data and economic analysis relating to the benefits and costs that could result from adoption of a uniform fiduciary standard governing personalized investment advice provided to retail customers. In the release, while not committing to any specific actions, the SEC laid out a number of “assumptions” that may well presage the ultimate contours of any fiduciary duty imposed on broker-dealers.


Over the last decade, a number of studies have noted the convergence of services provided by broker-dealers and investment advisers to retail customers, and raised concerns about investor confusion regarding the different standards governing advisers and brokers. These studies were cited by Congress when it included in the Dodd-Frank Act a provision empowering the SEC to adopt a uniform fiduciary standard for broker-dealers and investment advisers when providing personalized investment advice to retail customers.

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