A Breath of Fresh Air
There’s something encouraging and refreshing about the sight of Cherry Blossoms blooming anew in our nation’s capital after a long winter.
I feel the same about the news that two financial services regulators are planning to cooperate in an effort to help simplify things for individual investors and their advisors.
As Think Advisor recently reportedthe Financial Industry Regulatory Authority (FINRA) is planning to revamp or eliminate its existing suitability rule once the U.S. Securities and Exchange Commission’s pending Regulation Best Interest rule (Reg BI) is finalized.
While speaking at the Securities Industry and Financial Markets Association’s annual compliance conference, Robert Colby, FINRA’s chief legal officer, said: “There’s a lot of overlap between the existing suitability rule and the direction that Reg BI is going.”
After Reg BI is finalized, Colby said FINRA will “look to see first, is there anything different between our [suitability] rule and the way it [Reg BI] comes out? We’ll fix that because we’ll be enforcing Reg BI and we don’t want to be inconsistent in any way.” If FINRA decides to keep its suitability rule, “we want to make sure they are completely aligned,” Colby added.
Now, if only the US Department of Labor could take a similar approach to regulations governing the management of Individual Retirement Accounts, our industry could get closer to something investors and advisors would greatly appreciate – more consistent and clearer rules around the many different types of accounts available to them.
You can find more of my thoughts on the financial industry and how we can best serve our clients and the society we share at FinanceForTheGreaterGood.com.
Director of Wealth Management-Harrisburg
5 年Seems to me there is only one clear direction and that is that the industry adopt the best interest rule. How can there be any other solution? Eliminate all conflicts of interest and let’s stop brokerage outfits from acting like fiduciaries when all they are doing is selling product. Example is the popular strategy of a broker to set up a fee only managed account and then carve out a nice piece for an annuity sale— I call it the payday account. We need need our legislators to push to adopt best interest rule across all accounts, not just IRA’s.
Senior Vice President, Financial Advisor---Baird
5 年Good idea!!
Financial Services | Salesforce CSG
5 年Great point about the DOJ. Thanks for sharing your thoughts John.