Monday, December 21, 2009
Without Broker Education Clause, Reform Bill Falls Short
Late last week, the House of Representatives narrowly passed a bill intended to rein in Wall Street’s worst excesses. The bill is designed to protect the rest of the economy from the big banks’ enormous appetite for risk. Some of the proposed changes are systemic, and the banks are now furiously lobbying to defeat those measures.
In addition, the bill has some provisions aimed at helping retail investors. For example, the bill would impose a fiduciary duty on brokers, requiring them to recommend only suitable investments and to put their clients’ interests ahead of their own. This step is long overdue since brokers, just like their investment advisor counterparts, typically offer products and services that go well beyond the simple purchase and sale of stocks and bonds-giving advice on mortgages, insurance, college tuition and retirement planning. In light of these wide-ranging responsibilities, many of which go to the heart of investors’ financial well-being, it only makes sense that brokers should be held to this higher standard...
Seeking Alpha: Without Broker Education Clause, Reform Bill Falls Short
In addition, the bill has some provisions aimed at helping retail investors. For example, the bill would impose a fiduciary duty on brokers, requiring them to recommend only suitable investments and to put their clients’ interests ahead of their own. This step is long overdue since brokers, just like their investment advisor counterparts, typically offer products and services that go well beyond the simple purchase and sale of stocks and bonds-giving advice on mortgages, insurance, college tuition and retirement planning. In light of these wide-ranging responsibilities, many of which go to the heart of investors’ financial well-being, it only makes sense that brokers should be held to this higher standard...
Seeking Alpha: Without Broker Education Clause, Reform Bill Falls Short
Permalink posted by markw @ 5:17 AM 
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