Republican members of the House Financial Services Committee have urged the Securities and Exchange Commission not to move forward with a universal fiduciary standard.
In a letter to SEC chairman Mary Schapiro dated March 17, 14 GOP members, led by chairman of the Capital Markets Subcommittee Rep. Scott Garrett, wrote, "It is our view that the commission has not identified and defined clear problems that would justify a rulemaking, and does not have a solid basis upon which to move forward."
The letter was in response to a January report, mandated by Dodd-Frank and released by the SEC, which recommended that a universal fiduciary standard of care be created to protect investors. The report claimed investors could easily be confused by the current rules, which state that advisors must give advice that's in the client's best interest, while broker-dealers must give guidance that is suitable for an investor's needs, timelines, and risk appetite.
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