SIFMA Will Support Proposal to Hold Brokers To A Fiduciary Duty

The Securities Industry Financial Markets Association has announced that it will support President Obama's plan to hold brokers to a higher, fiduciary standard when providing investment advice to clients.

This is a major concession, and promises to create some headaches for brokerage firms when they sell securities underwritten by the firm or when they hold the securities in their own inventory. That said, it has been shown that investors fully expect their brokers to act in their best interests, and with the current popularity of fee-based, advisory accounts, often the brokers already are deemed to be acting as a fiduciary. The new fiduciary standard should eliminate any confusion.

Moving forward, let's hope so.