With Congress set to consider the issue of whether to include a fiduciary standard requirement for brokers in financial reform legislation, or just a study of the issue, on Wednesday, lobbying groups are scrambling to sway legislators. On Monday, the Committee for the Fiduciary Standard, a group of 775 investment professionals, sent a letter to Conference members that asks why "concealing conflicts is considered permissable for brokers but not for IAAs?" The letter says a study is not warranted, because the questions a study would seek to answer have already been addressed by The Rand Report. It further states that both brokerage industry leaders and brokers themselves want a fiduciary standard.
Meanwhile, a diverse group of consumer advocates, regulators and financial industry members has scheduled a media call for Tuesday to announce a "unique consensus position on financial reform." Speakers on the call include Denise Voigt Crawford, President of NASAA (North American Securities Administrators Association), Bob Glovsky, a spokesperson for the Financial Planning Coalition, Barbara Roper, Director of Investor Protection at the Consumer Federation of America and David Tittsworth, Executive Director of the Investment Adviser Association. According to a pre-call briefing, the speakers promise to discuss:
- the single most important protection for average investors in the finance reform bill
- why investors cannot afford the Senate approach
- the importance of ‘fiduciary standard of care’ as a critical consumer protection
- why the current ‘suitability’ standard is inadequate
- why brokers need additional oversight
- how the House version of the bill truly protects consumers