Controversy over regulators’ efforts to protect investors are nothing new. A few years ago, as the Department of Labor worked to finalize its “fiduciary rule” for retirement accounts, it often seemed like proponents and opponents of the rule were speaking a different language and drawing from a completely distinct set of facts. It should be no surprise then that, with finalization of the SEC’s new “Regulation Best Interest,” it seems again as though boosters and critics are describing completely different regulations.
The financial-services industry argues that the regulation is a step forward in protecting consumers, while breathing a sigh of relief at its overall scope. Consumer advocates have been arguing that the rule maintains the status quo and is less than useless because it will give investors a false sense of advisors’ obligations to them.