The SEC has delayed establishing new rules that would level the playing field for broker dealers and other investment advice providers. A decision had been expected to mandate both types of entities to operate under a common fiduciary standard. The SEC stated that a decision on the final regulation will not be available until later this year, instead of the projected timeline of spring to early summer.
The Dodd-Frank financial regulatory reform law called for SEC commissioners to extend a fiduciary duty requirement to broker dealers to protect investors confused by the different standards advisers and brokers are currently subject to. Studies found that the average investor has no understanding of the distinction between advice providers or that only registered investment advisers have a legal obligation to act in the client’s best interest.