August 20, 2010
As an independent advisor I adhere to the fiduciary standard. Nevertheless, I OPPOSE extending this standard to brokers and broker-dealers because I fear it will do little to nothing in the way of changing the behavior of the brokerage industry. There is simply far too much financial incentive to maintain the current behaviors and too little resource to actually enforce the standard. The industry will merely use it as a marketing tool to falsely reassure investors that they always act in their best interests. You will likely end up with an even worse situation: an industry behaving exactly as before with more clients.
A better solution will be to make the disclosure that brokers are not fiduciaries far more prominent and far more understandable to the investing public.