FIDUCIARY STANDARD ABSENT FROM SENATE REFORM BILL
Broker/dealers and insurers may see better informed retail investors vote with their heads and feet.
While the provision requiring a fiduciary standard is notably absent from financial reforms passed on May 20, 2010 by the Senate, the fiduciary requirement is in the House’s version of financial reforms. The Senate caved on this point to the special-interest lobbies of the insurance and broker/dealers (B/Ds), and it is no wonder.
The industry spent hundreds of millions of dollars lobbying to keep the fiduciary requirement (and other pesky pro-consumer provisions) out of the bill. Instead, a “study” of whether brokers should be required to put investors’ interests ahead of their own or their own was substituted, postponing or potentially cancelling one of the most important pro-investor reforms in 75 years.
