Levitt: End of Merrill rule good for investors

Broker and advisers should come under the same regulatory umbrella, said former Securities and Exchange Chief Arthur Levitt, speaking in Phoenix yesterday.

Broker and advisers should come under the same regulatory umbrella, said former Securities and Exchange Chief Arthur Levitt, speaking in Phoenix yesterday.
“The Merrill Lynch rule only served to confuse investors,” he said at the Investment Management Consultants Association’s Spring Professional Development Conference.
“While brokers will say they are under NASD oversight, they are not regulated with the consumer in mind and can sell more expensive vehicles.”
The decision by the U.S. Court of Appeals for the District of Columbia Circuit in Washington will lead investors to learn more about their brokers than they ever need before, he said.
The rule, issued in 2005, exempted brokerage firms that charge asset-based fees from investment advisory regulations under specified conditions (InvestmentNews, March 30) .
“We need to bind brokers and advisers by similar fiduciary standards,” he said. “Just as you put your health in a doctor’s hands, investors need to do the same with brokers and advisers.”
“There should be no exceptions,” he said.