The Decline of the Fiduciary Brand?
Extending a fiduciary rule to brokers could actually weaken the fiduciary standard for advisors.
Some years ago, an industry lobbyist at a luncheon preceded a presentation by an NASD (now FINRA) official by asking: "What is the difference between an investment advisor and a broker? Answer: A broker doesn't call you in the middle of dinner."
Advisors continue to make a point of staking out the differences between themselves and brokers, often on the ground that advisors are fiduciaries and brokers are not. However, if the SEC follows a staff recommendation to impose a fiduciary duty on brokers, advisors may lose an important weapon in their marketing arsenal.