From Wall Street to Main Street: Update on Standard of Conduct for Investment Advisers

Retail investors are confused! They fundamentally cannot differentiate between a broker-dealer and an investment adviser. And that has the SEC concerned. So when the DOL Fiduciary Rule was overturned earlier this year, the SEC stepped into the debate with its April proposal. And that was a key topic of discussion at the recent CSS/Ascendant fall conference, “Decrypting Regulations: Cracking the Code to Powerful Compliance Programs.”

The Regulation Best Interest and Standard of Conduct proposed package has the ability to significantly impact both the broker-dealer and investment advisory industries. But according to Sanjay Lamba of the Investment Advisory Association and Korrine Kohm, Director of Retail Wealth Services at Ascendant Compliance Management, the rule may still have a bit of a journey ahead of itself – a rocky one at that.

After a detailed discussion of the key elements of the Regulation Best Interest which would apply to broker-dealers, the panelists deliberated on the standard of conduct for investment advisers presented by the SEC. But the depth of the conversation focused on an overview of the Form CRS and a lively discussion on why the SEC took up this challenge.

Not only evident by the multitude of comments letters submitted to the SEC on the proposal, the overall consensus by the panel and attendees at the conference is that we should expect the final rule to change dramatically from the April proposed rule.

The reality is, getting the rule passed must weigh heavy on SEC Chairman Jay Clayton’s mind. Imagine he could take credit for finally putting the fiduciary rule debate to bed? It would seem that would be a great way to mark his tenure as SEC Chairman. For now, we wait. And we hope the SEC takes care in passing a final rule that is in the best interest of the entire industry and, more importantly, the retail investor.


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CSS frequently publishes blog posts which are written by our team from their observations in the field, at conferences and through experiences with compliance professionals. These posts are designed to further knowledge and share industry best practices. Topics run the gamut, including Form ADV, cybersecurity, MiFID II, position limit monitoring, technology challenges and more. Complete and submit the brief form below to receive notifications when we publish new content.

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