Wednesday, 24 January 2018 11:36

B-Ds Next to Fall Under Fiduciary Rule

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(New York)

InvestmentNews has run a very ominous article. The piece cites recent evidence published by the Wall Street Journal showing that large discount broker-dealers often mislead clients by saying they do not have incentive fees when they do. Firms like Charles Schwab and TD Ameritrade often brand themselves in a very positive light, saying things like being “champions of investors" and putting clients first etc. However, such misleading behavior may lead to the current or future fiduciary rules being extended to cover broker-dealers entirely, not just regarding disclosing conflicts of interest.

FINSUM: We don’t think the current DOL rule is going to be extended in any way, but it does seem likely that the SEC might take this into account as it creates a new, more comprehensive rule.

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