broker standards Archives - Americans for Financial Reform

Joint Letter: Report to SEC Highlights Disclosure Weaknesses of Broker Standards Rule

Given the evidence that, after being provided a summary relationship disclosure, investors still cannot fully understand, and in some cases misunderstand, fundamental differences in the nature of the brokerage and advisory relationships and the respective duties they are owed, the different fees they would pay, or how various conflicts of interest can influence the recommendations they receive, a regulatory regime that relies on disclosure for investors to make an informed decision about what type of financial professional to work with and what type of account to use is certain to fail.

News Release: SEC Advisory Committee Right to Seek Major Changes to Broker Standards Proposal

What we heard today from the diverse membership of the SEC’s own advisory committee is that they share our view that the proposed Reg BI would not protect investors. The IAC has called on the SEC to instead pass rules that make clear that brokers have a legal obligation to act in the best interests of their clients.

AFR/CFA Memo: SEC Broker Standards Proposal Falls Far Short

Brokers too often steer investors into poorly performing, high-cost investments that are profitable for the broker, but bad for individual investors. The Securities and Exchange Commission has proposed a new regulation that purports to address the problem, but its remedy is too vague and too weak. By creating a veneer of protection, but not the reality, it would deliver a false sense of security that could leave investors worse off than they are now.