Jay Clayton is taking a public look at the fiduciary standards debate, and he wants input from you. Meanwhile, a pair of big broker-dealers are making more adaptive moves in advance of the DoL's own controversial fiduciary rule, which takes effect next week.

Jay Clayton SEC Chairman

Yesterday Clayton, whom the Senate confirmed as Securities and Exchange Commission (SEC) chairman a month ago, issued a request for comment on what (if anything) the SEC might do about fiduciary issues, four years after the SEC's most recent such request. He wonders about the DoL's fiduciary rule having "significant effects on retail investors" and "broader effects on our capital markets." And he calls for "clarity and consistency", and even coordination, as "key elements of effective oversight and regulation" as the DoL and the SEC address fiduciary issues.

Clayton's public statement on the matter includes questions across a host of fiduciary-related issues and also includes an open-ended request for any other relevant information. Fundsters, weigh in now!

Josh Lichtenstein, an attorney at Ropes & Gray, states that Clayton's move "creates more uncertainty for institutions that are working to comply with the DOL fiduciary rule and who must now face the possibility of needing to make further changes to their compliance and marketing practices in response to any new rule making." InvestmentNews argues that Claytons request "suggests more coordination" between the SEC and the DoL.

Meanwhile, in light of the fiduciary reg starting to take effect next week, UBS is telling its financial advisors that they'll only receive asset-based fees on retirement accounts and that a "small list" of products (like UBS' own exchange-traded notes) can no longer be sold, UBS Wealth Management Americas president Tom Naratil tells Elizabeth Dilts of Reuters. The wirehouse's FAs working with retirement accounts will still be able to use a DoL-rule-mandated best interest contract (BIC) to offer clients load mutual funds and other commission-based products, but the variable compensation generated from those products will go to UBS while the advisors themselves will receive only asset-based fees.

And the biggest independent B-D, LPL, is telling its FAs that no-load mutual fund sales will be restricted in brokerage accounts and that compensation on fixed annuities and unit investment trust will be levelized, Bruce Kelly of InvestmentNews reports. The pub notes that LPL already levelized comp on variable annuities last year. 

Edited by: Neil Anderson, Managing Editor


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