A call by the Obama administration to establish a fiduciary standard for broker-dealers offering investment advice was welcomed today by financial advisers, but they are concerned about plans to “harmonize” regulation of investment advisers and brokers.
A call by the Obama administration to establish a fiduciary standard for broker-dealers offering investment advice was welcomed today by financial advisers, but they are concerned about plans to “harmonize” regulation of investment advisers and brokers.
The Financial Regulatory Reform plan released today by the administration includes a proposal to “establish a fiduciary duty for broker-dealers offering investment advice and harmonize the regulation of investment advisers and broker-dealers.”
“We think it’s great,” Diahann Lassus, chairman of the National Association of Personal Financial Advisors, said of the plan. “You shouldn’t have to separate standards for the broker and the advisers.”
Ms. Lassus is also president of Lassus Wherley & Associates PC of New Providence, N.J., which manages $250 million.
Dan Barry, Washington-based managing director of the Denver-based Financial Planning Association, agrees.
However, he and Ms. Lassus expressed concern about the language regarding harmonization.
“We’d be concerned if by harmonization they would subject investment advisers to the oversight of [the Financial Industry Regulatory Inc. of New York and Washington],” Mr. Barry said.
Indeed, in remarks prepared for the Exchequer Club in Washington today, Finra chairman and chief executive Richard Ketchum hailed the administration’s call for harmonizing the regulation of investment advisers and broker-dealers, and he again called for putting investment advisers under Finra regulation.
“Finra is uniquely positioned to build an oversight program that ensures investment advisers are properly examined and their customers are adequately protected,” he said in his remarks.
