The U.S. securities industry supports a new uniform fiduciary duty for both broker-dealers and investment advisors, says the industry lobby group; but, it maintains that the standard must be fair, and fairly enforced.

“Investors’ best interests should be put first by their financial advisor,” says Ira Hammerman, senior managing director and associate general counsel at the U.S. Securities Industry and Financial Markets Association (SIFMA), in a new posting on SIFMA’s website.

Hammerman stresses that SIFMA supports a uniform fiduciary standard for both brokers and investment advisors, adding, “Recent commentary that suggests SIFMA supports anything less is simply not accurate.”

What it doesn’t favour, he explains, is simply grafting the existing standard that advisors must adhere to, onto the broker business. This, he says, would unfairly favour fee-based advisors, and would reduce access to advice for less affluent clients.

Instead, he says that a fiduciary standard for brokers should be “equally robust”, but also tailored to the brokerage business. “Although the breadth of products and services [offered by brokers] may raise prospective conflicts that need to be appropriately managed, they do not preclude a broker from fully satisfying a fiduciary standard,” he says.

Additionally, a uniform standard also requires uniform oversight and enforcement. “A fiduciary standard will only protect investors if it is appropriately enforced,” he says. “Further, common sense tells us that a uniform fiduciary standard should be uniformly enforced.”

As it stands, the U.S. Securities and Exchange Commission (SEC) only has the resources to examine investment advisors every 11 years, he notes; whereas, the self-regulatory organization for brokers examines firms under its jurisdiction every two years.

Therefore, he suggests, “Investors will be better served if a self-regulatory organization is given authority to oversee and examine investment advisors with far greater frequency.”

“Just about everyone in the financial community agrees that we’ve had a bifurcated set of standards for individual retail brokers and advisors who provide personalized investment advice for long enough,” he concludes. “As the SEC moves forward to contemplated rulemaking, our members remain committed to providing the fact-based insight the SEC needs to craft rules that work, by both protecting individual investors and adapting to different business models.”