US Lets Supreme Court Deadline Lapse to Challenge 5th Circuit Fiduciary Ruling

Foregger hopes the SEC's Regulation Best Interest, or Reg BI, for brokers, which is part of the regulator's advice conduct standards package, once in final form, "will assist in moving the industry toward a unified fiduciary standard over the coming decade. Time will tell."

Is a 'Uniform Fiduciary Standard' Realistic?

Industry officials debated the likelihood that a "uniform fiduciary standard" for brokers and advisors would ever see the light of day during a Thursday meeting of the SEC's Investment Advisory Committee, held in Atlanta.

Barbara Roper, director of investor protection for the Consumer Federation of America, a member of the SEC committee, asked a panel at the meeting if they would "be comfortable, since we have the apparent agreement that this [Reg BI] is intended to be, in essence, a fiduciary standard, if the commission called it a fiduciary standard?"

Karen Barr, president and CEO of the Investment Adviser Association, responded that "to me, a fiduciary standard means you're a fiduciary throughout the entire relationship, so I don't think this [Reg BI] is a fiduciary standard. I do think it [Reg BI] draws on fiduciary principles and it can get to a place where it's as robust—[having] the core principles as a fiduciary standard."

Ira Hammerman, general counsel for the Securities Industry and Financial Markets Association, responded, "We started down this journey calling for a uniform fiduciary standard. I'll just assume that people a lot smarter than me in putting together this voluminous 1,000 page [SEC advice standards] proposal, in weighing all the pros and cons, decided that that was a bridge too far. We want to see something done here."

At the end of the day, Hammerman continued, "there are strengths and weaknesses to both models—at the broker-dealer level, you've got FINRA kicking the tires, doing exams, … there's no similar analogue on the investment advisor side even with the package of proposals put forward by the SEC."

While there are differences in the broker and advisor models, he added, "I think we can achieve high standards for both."

Hammerman also agreed with other comments made throughout the meeting that the SEC needs to issue "clear guidance on what's meant by best-interest" in the Commission's proposal.