One of the greatest philosophers of our time, Yogi Berra, must have had the debate over the uniform fiduciary duty standard when he penned this line. Yes, believe it or not, the debate is about to resume.
The SEC is yet again working on possible recommendations regarding a uniform fiduciary duty for investments advisors and broker-dealers. In accordance with Dodd-Frank, the SEC is expected to issue a request for information for economic data to determine the viability of such a standard.
All of the debate seems like much ado about nothing. There is generally widespread industry support for a uniform standard, as long as it takes into account the nuanced differences between investment advisors and broker-dealers.
Although the standard will likely become reality in some form, is all of this time and money being spent on the debate really worth it. In my years of defending broker-dealers, courts and arbitration panels already have routinely imposed a fiduciary duty standard on broker-dealers. Indeed, it is common for a broker-dealer’s WSPs to state that the associated persons owe a fiduciary duty to their customers.
It seems to me that the only real benefit of having a uniform standard is to have courts and arbitration panels apply one standard, as opposed to multiple and inconsistent application to a floating standard. A uniform fiduciary duty will exist, the only question is whether we will all live to see it.