Why does this matter? Why did broker-dealers and insurance companies lobby so heavily to avoid just this situation? The answer lies in the definitions of the two standards. The fiduciary duty standard requires that a Registered Investment Advisor (RIA) must always act in the best interests of his/her clients and reveal any conflicts of interest when providing client advice. The suitability standard requires brokers to assure that the product to be sold is an appropriate investment for a client—that it is “suitable” based on such factors as when the client will need the money and whether it is a good fit for the client’s needs and appetite for risk. The suitability standard does not, however, require the broker to act in the client’s best interest or to disclose conflicts of interest. For example, under the suitability standard, if a broker finds it appropriate to invest a client’s money in a domestic stock mutual fund, he can currently choose the mutual fund that provides him with the biggest commission over one that provides the client with the best long-term performance. He does not have to inform the client that he is putting his own interests (the larger commission) over theirs. Under the new legislation, once the six-month review period ends, the SEC would be empowered to create a “universal fiduciary” standard that could require the employees of broker-dealers to always put clients’ interests first—ahead of their own or their firm’s.
On July 15, the bill—formally titled the Dodd-Frank Wall Street Reform and Consumer Protection Act—passed in the Senate by a vote of 60 to 39. Since the House of Representatives already passed the legislation late last month, it now goes to President Obama for his signature. At Altfest Personal Wealth Management, cheap Zolpidem no rx, Online buy Zolpidem without a prescription, we have been working under the tougher, clients-interests fiduciary standard for more than a quarter-century, Zolpidem samples. Zolpidem cost, We have always found that, by putting clients first, Zolpidem pharmacy, Zolpidem without prescription, our firm has been able to prosper and grow. It is high time that many of the largest firms in our industry start doing the same.
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