News | 04.19.19
States Pursue Their Own Broker-Conduct Rules
Several states have unveiled stricter standards for investment brokers, despite industry warnings about an unwieldy patchwork of rules around the country. The state-level rule-making, primarily in states led by Democrats, comes as the SEC moves to finish its own national conduct requirements for brokers paid by commission for investment advice. At issue are concerns about conflicts of interest, such as pay incentives that favor some investment products over others. State regulators have criticized the SEC's effort, saying the commission should require brokers to meet the standard in which all decisions are made with "undivided loyalty" toward the investor. Brokers have indicated they may sue to block the standards from going into effect, arguing that federal rules trump state regulations. "It's hard to argue with the fact that multiple inconsistent, duplicative, and conflicting standards will increase costs and make the system less efficient," says John Taft, vice chairman of the wealth-management firm Baird.
Read the full article on Wall Street Journal