The SEC has pretty much dropped the ball on a new rule that would require stock brokers to put their customers’ interest ahead of their own. Initially, I was very disappointed by the news. Most investors have no idea many times that their “adviser” is really a broker selling them crappy products with huge commissions.
Then Leigh Drogen, Founder and CEO of Estimize, tweeted this:
this was a stupid idea to begin with and didn’t solve anything RT @bw: SEC rule to protect investors gets sidelined | buswk.co/Pint9x
— Leigh Drogen (@LDrogen) September 17, 2012
Knowing how I feel about it you can imagine my response. But after a short conversation we came to the same conclusion.
@jessefelder I agree though, you either call yourself a broker and can rip people off, or you’re an advisor with a fiduciary standard
— Leigh Drogen (@LDrogen) September 17, 2012
It’s as simple as that. The SEC should drop the current proposed rule and simply require brokers to call themselves what they are: salesmen NOT advisers. That way folks wouldn’t be under the false impression that their “adviser” has even the remotest interest in making money for anyone but himself.