FINRA also stated that the federal securities laws should "serve as the foundation of the best interest standard
that will apply to broker-dealers," adding that DOL's redraft does not meet "some of the minimum criteria for such a standard.
These fiduciary standards require advisors to adhere to a best interest standard
when making investment recommendations, charge no more than reasonable compensation for their services and refrain from making misleading statements," DOL stated in the Tuesday release.
What a best interest standard
doesn't mean is that you have to buy the lowest-cost product; the North Star is the best interest of the customer.
SIFMA said its best interest standard
"could be articulated, for example, through amendments" to existing FINRA rules, "as approved by the SEC," and in a way that would be consistent "not only with SIFMA's historical position" and with Dodd-Frank Act's Section 913, but also with the "best interest standard
set forth in the DOL's [best interest contract exemption], and without certain conditions and requirements currently contained" in that exemption.
IRI's blueprint calls on Congress to replace the rule and "establish a consistent best interest standard
of care that preserves access to retirement advice and offers a wide array of lifetime income products for America's retirement savers.
The legislation makes clear that sale of proprietary products or sale from a limited menu of products shouldn't to automatically violate the fiduciary standard, but it does not follow that a recommendation from that limited menu of products should automatically be deemed to satisfy the best interest standard
for each and every customer as long as the limitation is disclosed, argued the group.
24 (reported in RIA Biz): "We believe that requiring better disclosure and application of the best interest standard
can and should be accomplished while keeping RIAs and broker-dealers distinct under the existing statutory and regulatory frameworks .
We have long supported a best interest standard
, adopted by the appropriate regulatory authority and across all individual investor accounts, not just retirement," the groups said.
Lynn's 81-page opinion carefully refutes key industry positions on the basis, workability, costs and requirements of BICE; defining "reasonable compensation" and the best interest standard
1, full compliance is required, disclosing all conflicts of interest, general disclosure about an advisor's compensation and a promise to adhere to a best interest standard
of care via signed contract between advisor and client and use of a full BIC for exemptive relief.
With about 14,000 affiliated independent advisors, "LPL continues to believe a best interest standard
is appropriate for our industry," it explained in a statement.
Reiterating that SIFMA's members "have long supported a best interest standard
for brokers who provide personalized investment advice, the DOL is not the right agency nor is the DOL rule the right approach.