July 30, 2010
I am opposed to setting a legal fiduciary standard for broker-dealers and their registered representatives. The current suitability standard is strong and well enforced. There will always be some failures regardless of any system, such as Bernie Madoff. Both costs and benefits need to be weighed in setting the criteria for regulation. Compliance costs with the new standard will likely be much higher and involve substantial costs in the transfer from one system to another.
The principal of unintended consequences should also be thought about carefully.