SEC advice rule proposal assailed by former agency economists

SEC advice rule proposal assailed by former agency economists
Letter cites proposal's 'weak and incomplete' economic analysis.
FEB 11, 2019
By  Bloomberg

The Securities and Exchange Commission plan for overhauling broker conflict-of-interest rules is coming under fire from an unusual source: a group of its former top economists. In a sharply worded comment letter, 11 former SEC officials faulted the proposal released last April under the direction of Chairman Jay Clayton, citing what they called "weak and incomplete" economic analysis. "We find it worrisome that the proposal's economic analysis does not fully consider some potentially important dimensions of the retail client-adviser relationship," the officials wrote in the letter dated Feb. 6. Mr. Clayton has made completing the regulation, which would replace an overturned Labor Department measure, a top priority and held meetings around the country last year to hear from investors. He's said he's open to changes as progressives have argued that the proposal didn't go far enough and critics from both parties have said the "best interest" obligation it would impose is too vague. The current proposal "seems to fall short of the best attainable analysis, and we are concerned about the commission's reputation for doing careful economic policy analysis," the former SEC officials wrote in their letter. "We encourage the commission to do better." A spokeswoman for Mr. Clayton didn't immediately respond to a request for comment. (More: Best the SEC can do or huge step backward? Industry leaders tussle over advice reform)

Latest News

Carson, Lido strengthen RIA networks with bicoastal deals
Carson, Lido strengthen RIA networks with bicoastal deals

Carson is expanding one of its relationships in Florida while Lido Advisors adds an $870 million practice in Silicon Valley.

Goldman gets shareholder backing on $80M executive bonus packages
Goldman gets shareholder backing on $80M executive bonus packages

The approval of the pay proposal, which handsomely compensates its CEO and president, bolsters claims that big payouts are a must in the war to retain leadership.

Integrated Partners, Kestra welcome multigenerational advisor teams
Integrated Partners, Kestra welcome multigenerational advisor teams

Integrated Partners is adding a husband-wife tandem to its network in Missouri as Kestra onboards a father-son advisor duo from UBS.

Trump not planning to fire Powell, market tension eases
Trump not planning to fire Powell, market tension eases

Futures indicate stocks will build on Tuesday's rally.

From stocks and economy to their own finances, consumers are getting gloomier
From stocks and economy to their own finances, consumers are getting gloomier

Cost of living still tops concerns about negative impacts on personal finances

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.