Is There Magic in the Term ‘Fiduciary’?
July 26, 2019 by Melanie Waddell
Two Securities and Exchange Commission officials went toe-to-toe Wednesday on whether there’s “magic” in the term fiduciary.
During a question and answer session at a Regulation Best Interest seminar held by the Securities Industry and Financial Markets Association at WilmerHale in Washington, Brett Redfearn, director of the SEC’s Division of Trading and Markets, said that while the agency “talked about a uniform standard” for brokers and advisors while crafting its four-pronged advice-standards package, “it became very clear to me in the early stages these are different forms of advice” offered by advisors and brokers. “There was no magic in the term fiduciary,” Redfearn said, adding that it “was not clear that everybody had a clear understanding of what fiduciary meant.”
Dalia Blass, head of the SEC’s Division of Investment Management, countered, however, that “the term fiduciary is magic for us in Investment Management,” adding that fiduciary “does mean something … people knew it was a big word and important but had difficulty in describing what it is.”
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