Dodd bill would make reps fiduciaries

Consumer groups on board, but SIFMA prefers House approach that could redefine ‘fiduciary’. The senate draft unveiled last week eliminates the “broker-dealer exemption” from the adviser registration provisions under the Investment Advisers Act of 1940, effectively requiring brokers providing advice to register as advisers and be subject to a fiduciary standard. That standard would be the same applied to advisers and would require them to put the client’s interests first. The House bill would require all brokers providing advice to abide by fiduciary standards, but would give the Securities and Exchange Commission the discretion to write regulations defining those standards. The SEC revision of fiduciary standards could result in rules closer to those which brokers work, which require only that products be suitable to the investor. The Obama administration’s plan would require brokers to come under a fiduciary standard.