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IPA Submits Comments to SEC on Standards of Care for Investment Advisers and Broker-Dealers

By February 20, 2018No Comments

The Investment Program Association recently submitted comments to the Securities and Exchange Commission (“the Commission”) regarding standards of conduct for investment advisers and broker-dealers.  Click here to read the letter in its entirety. The IPA’s primary positions are summarized below:

  • The IPA supports a uniform, national best interest standard of care for broker-dealers when providing non-discretionary, personalized investment assistance to retail clients. Broker-dealers have successfully operated under this framework and existing guidance for years and the practical differences between current investor-facing standards of conduct applicable to broker-dealers and investment advisers are not significant.
  • The IPA firmly supported delay of full implementation of the DOL fiduciary rule until July 1, 2019. The delay allows the industry sufficient time to comply with those provisions currently in effect.  The IPA believes that the Commission is best suited to consider a balanced and appropriate standard for all investment professionals and to analyze the impact to date of the DOL fiduciary rule.
  • The IPA believes that the appropriate approach is a flexible, principles-based approach rooted in the longstanding and widely accepted disclosure regime under the U.S. securities laws. The IPA encourages the Commission to consider the negative impact on capital raising as a result of significant rulemaking in recent years by federal and state regulatory agencies, as well as the cost and complexity of implementation and compliance in any new rulemaking.
  • The IPA also encourages the Commission to take note of the increasing trend toward fee-based brokerage services and a reduction in services for small or modest-sized accounts as a result of the DOL rule. The Commission should instead pursue a non-biased approach promoting investor choice in any account type, recognizing both the benefits and differences in services, products and compensation structures.

The IPA appreciates that the Commission is analyzing and reviewing appropriate standards of conduct applicable to the investment professionals it regulates.  We look forward to working with them to develop a uniform, national standard to avoid duplicative or conflicting national and state fiduciary standards.

We will continue to keep you updated on this important initiative in the months ahead.

Best regards,

Tony Chereso
President & CEO
Investment Program Association