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SEC Fiduciary Rule Proposal to Potentially Differ from DOL’s

By Jonah A. Toleno, Esq.  of Shustak Reynolds & Partners, P.C. posted on Friday, March 25, 2016.

Jonah A. Toleno

Jonah A. Toleno

Of Counsel

Location: San Diego, California
Phone: (619) 696-9500 (Ext. 104)
Direct: (619) 501-6483
Email: [email protected]

Calling all financial advisors – time to grab your compasses and brush up on your map-reading skills. As if the path to confirmation of the Department of Labor (DOL) fiduciary rule were not controversy-ridden enough, according to Investment News, SEC Chairwoman Mary Jo White announced this week the SEC may propose its own rule that “may not mesh perfectly” with the DOL’s. What does this mean for financial advisors? In addition to conforming to the pending DOL rule, which imposes more stringent retirement investment advice standards, advisors may need to comply with a separate SEC fiduciary standard. Chairwoman White told a House Appropriations subcommittee on Tuesday that an SEC rule proposal may digress from the DOL’s because the SEC and DOL are “separate agencies [with] separate statutory mandates.” According to public sources, the SEC expects to issue its rule proposal in October of this year. Investment News reports that Chairwoman White supports a uniform fiduciary standard but is unsure whether the SEC will propose its own rule. Supporters believe a separate proposal is necessary to enforce the SEC’s federal securities directives independently of the DOL. Opponents anticipate that imposing two potentially divergent standards on advisors will cause industry-wide confusion. It’s impossible to predict who’s right. Only time will tell whether advisors ultimately will have to navigate through more than one fiduciary standard.

Shustak Reynolds & Partners, P.C. has extensive experience with securities, investment, and fiduciary duty claims. If you’re a financial advisor unsure of your obligations, or if you’re an investor with concerns about your investment with an advisory firm, our attorneys are available to help. Contact us today to discuss your situation.

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