In an Investment News article written by Mark Schoeff, he reported that the push for a uniform fiduciary standard for broker-dealers and investment advisors has become a bit stagnant. In fact, it was reported that the prospects for such a uniform rules have waned over the years notwithstanding the general consensus that there should be such a standard.
Considering that there does not appear to be a uniform fiduciary duty standard looming in the immediate future, should retail broker-dealers even care any further. I think that the answer is still a resounding yes.
For one, in my experience, arbitration panels still struggle with the fact that broker-dealers are not subject to a fiduciary duty. As such, you may be held to that standard without really knowing it.
Where you do business is also of import. Depending upon the level of control you have over a customer’s account, some jurisdictions may impose a fiduciary duty on you as a matter of law. So where does this leave retail broker-dealers?
For one, you need to stay up on your compliance policies and procedures; promote a culture of compliance from the top down. Second, know where your clients are to be certain that you may not be considered a fiduciary without knowing it.
Although the uniform fiduciary duty appears to be stayed for now, do not lose your vigilance when it comes to your compliance and customer relations. Otherwise, you may be held to be something that you are not.
* photo from freedigitalphotos.net