August 2, 2010
As a retirement plan consultant for the past 19 years, I've worked frequently with brokers and investment advisors assigned to various participant-directed retirement plans. I've seen some brokers provide advice that they shouldn't, but regardless of the rules, the most astounding aspect of working with participants and employers, is that participants and employers don't understand the difference between brokers and investment advisors. As far as they are concerned, all brokers can give advice and are looking after their best interests.
If brokers are to keep a suitability standard and not a fiduciary standard, then participants should be notified and educated of the difference between brokers and investment advisors and clearly state their standard of care.