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Right on Commissioner Walter

SEC Commissioner Elisse Walter commented on a New York Times blog about the need to harmonize the “fiduciary” obligations of brokers and investment advisors…

What a great way for an official charged with protecting investors to address an issue… in the public.. in plain English no less… kudos to Commissioner Walter for her efforts… restoring Americans faith in the financial industry will be a long process… and real transparency like this is what is needed…

Commissioner Walter’s comment:

~~~”This well-written, easy-to-understand proposal captures the way that all financial professionals should treat investors. It recognizes that all financial professionals should be subject to a fiduciary duty. And in a simple and straightforward way it articulates the scope of the duty and cuts through what has become non-productive debate on this issue.

This articulation allows us to move on to another critical issue: financial professionals are unfortunately subject to different obligations when they are performing virtually identical services for investors. For example, a person cannot start a brokerage firm unless she demonstrates to a securities regulator that she has the expertise and operational capacity to engage in the type of business she proposes to start. No equivalent process exists for investment advisers. And, the law requires an adviser to disclose to his client the full range of circumstances where their interests may conflict, while the law governing brokerage firms does not impose that blanket obligation.

These are only two examples of the obligations that should be harmonized. I’m ready to see us get on with that work.” ~~~