The SEC dropped off to Congress on Friday night a staff study recommending a uniform fiduciary standard of conduct for broker-dealers and investment advisers - one that's no less stringent than currently applied to investment advisers under the Advisers Act - when those financial professionals provide personalized investment advice about securities to retail investors.  The study was required under the Dodd-Frank Reform Act.

    Study Findings.   Many retail investors don't know or understand the difference between investment advisers ("IA's") and broker-dealers ("BD's"), the different regulatory regimes that apply to BD's and IA's, and are mightily confused by the standards of care that apply to investment advisers and broker-dealers" when providing personalized investment advice about securities.  For these and other reasons - you've heard and read all too often - 

the study "recommends that the Commission . . . adopt and implement, with appropriate guidance, the uniform fiduciary standard of conduct for broker-dealers and investment advisers when providing personalized investment advice about securities to retail customers." The standard, according to the study, should be "no less stringent than currently applied to investment advisers under [the] Advisers Act."

The study also "recommends that when BD's and IA's are performing the same or substantially similar functions, the SEC should consider whether to harmonize the regulatory protections applicable to such functions.  Such harmonization should take into account the best elements of each regime and provide meaningful investor protection."

The study concludes that the "staff's recommendations were guided by an effort to establish a uniform standard that provides for the integrity of personalized investment advice given to retail investors.  At the same time, the staff's recommendations are intended to minimize cost and disruption and assure that retail investors continue to have access to various investment products and choice among compensation schemes to pay for advice."   

For further details, go to:   [SEC PR 11-20, 1/20, 'Staff Study']