The North American Securities Administrators Association (NASAA) said Friday that it supports a recommendation by the U.S. Securities and Exchange Commission’s Investor Advisory Committee (IAC) calling for broker-dealers to be held to a fiduciary standard when they provide personalized investment advice to retail investors.
NASAA president and Ohio Securities Commissioner, Andrea Seidt, endorsed the IAC’s recommendation. “A fiduciary standard for broker-dealers will guarantee that all financial professionals providing investment advice will act in the best interests of their clients, and in turn, enhance investor confidence in the financial services industry and securities markets,” she said.
“Establishing a uniform fiduciary duty standard governing the conduct of broker-dealers and their agents is crucial for the protection of investors,” she added. “Most investors cannot distinguish broker-dealers from investment advisors, nor do they understand the different legal standards applicable to either. As a result, many investors are confused and unable to make informed decisions about which type of financial professional to retain.”
Seidt added that NASAA also supports the committee’s call for legislation to fund investment advisor examinations. And, NASAA calls on the SEC and the U.S. Congress to take swift action both recommendations.