Fiduciary duty demands for the investing public
From a news alert:
The U.S. Securities and Exchange Commission (SEC) will hear directly this week from U.S. investors about what they want in terms of regulation of financial professionals providing investment advice and the extent to which they are confused as to who is held to a fiduciary duty.
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The organizations holding the news conference sponsored the survey in response to concerns that the SEC is receiving extensive feedback from financial industry groups, but relatively little from the U.S. investing public. As required by the Dodd-Frank Act, the SEC is requesting public input, comments, and data on issues related to the effectiveness of existing standards of care for brokers-dealers and investment advisers, and whether there are gaps, shortcomings, and other problem issues in the current legal or regulatory standards.
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TO PARTICIPATE: You can join this live, phone-based news conference (with full, two-way Q&A) at 1:30 p.m. EDT on September 15, 2010 by dialing 1 (800) 860-2442. Ask for the “SEC financial reform/fiduciary survey” news event.CAN’T PARTICIPATE?: A streaming audio recording of the news event will be available on the Web as of 5 p.m. EDT on September 15, 2010 at http://www.hastingsgroup.com/fiduciarysurvey.
What they are asking is should you trust financial advisers, should they have responsiblity to give the best advice for you or for their pocketbook. The SEC is considering making salestypes (brokers) have a fiduciary duty to their clients in recommendations made. I suspect (and this would be IMHO be a good thing) this will finally completly divorce the order taking and advice functions, driving order taking prices to where they are on the no service web brokers, and making advice something that you pay for seperatly. After all if you follow Boogle, investing is simple, you decide you can’t beat the market, so don’t even try, buy index funds, and look for low cost ones, and just stay there.
Its clear from the number of stories that financial types put all classes of investors in unsuitable investments ranging from poor deluded county treasurers in Al on down. If you read a lot of the retail houses used to have sessions where the brokers were told what the company had in inventory and they should push that day.
Actually I just believe we should tell everyone that any financial advisor whose pay depends upon a commission is out to get you. Trust them as far as you can throw them only.