In today’s WSJ, there is an article about investment industry fiduciaries. Apparently, the Department of Labor is moving forward in requiring brokers and investment advisers to avoid conflicts of interests.
And, the SEC, under the Dodd-Frank financial regulation law of 2010 can develop different standards for brokers and advisers. The latter group must avoid conflicts, but the former group must only disclose a conflict.
What a concept! In other words, if a stock broker’s company is underwriting the stock, the broker need only disclose the conflict. Try that in other professions, especially lawyers!
If we have a conflict of interest, we must do more than disclose. We must excuse ourselves. Yes, there can be a waiver, but that is not looked on with favor.
Of course, we follow the almighty dollar. The investment community is outraged that the DOL should believe it unlawful to proceed with a conflict of interest … We’ll see how this plays out.