IM Director's Recent Remarks on Standards of Conduct & Liquidity Risk Management

May 25, 2018 8:30:21 AM / by Bo J. Howell posted in Investment Advisers, Liquidity, SEC, SEC Rule, SEC Updates, Uncategorized, 1934 Act, Advisers Act, Brokers, Compliance, Directors/Trustees, Disclosure

IM Director's Recent Remarks on Standards of Conduct & Liquidity Risk Management

by Peter Michael Allen

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SEC Decides it's Time to Help Investors Understand the Difference between Brokers and Advisers

Apr 21, 2018 8:31:27 AM / by Bo J. Howell posted in Fiduciary, Investment Advisers, SEC, SEC Rule, SEC Updates, 1934 Act, Advisers Act, Brokers

The SEC has finally proposed a rule that will help clarify the distinction between brokers that refer to themselves as "financial advisors" and investment advisers. (We won't get into why it took so long or how this is a response to the Department of Labor's fiduciary rule, which was recently vacated by federal courts.) Most investors are unaware of the difference and the legal standards that apply to both. In the case of brokers, they are not fiduciaries, which means they do not have to act in the best interest of customers. Investment advisers, however, are fiduciaries and must always act in the best interest of clients. This may seem like a subtle distinction, but it's hugely important for investors that are not well-versed in the working of our securities markets.

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