John Taft, head of US wealth management at RBC Wealth Management today testified on behalf of the Securities Industry and Financial Markets Association (SIFMA) on the importance of creating a new, federal fiduciary standard for broker-dealers and investment advisers who provide personalized investment advice to individual investors. The proposed uniform set of federal fiduciary regulatory standards is designed to strengthen safeguards for investors and preserve investor choice. His testimony came before the House Financial Services Committee.
“SIFMA’s vision of a harmonized fiduciary standard is even stronger, and more pro-investor, than any other alternative we have heard advanced. As we previously testified, the central imperative of a fiduciary is putting investors’ interests first. A fiduciary should also act with good professional judgment, and avoid conflicts of interest, if possible, or otherwise effectively manage conflicts through clear disclosure and, as appropriate, investor consent. These decidedly pro-investor, core principles lie at the heart of what it truly means to be a fiduciary. This is the formulation of fiduciary that SIFMA endorses – and that individual investors deserve,” said Taft in his prepared testimony.
Taft explained that current state common law-based fiduciary standards are inadequate to serve as a harmonized standard for individual investors because they are “imprecise and indeterminate, and have been developed unevenly over time. Thus, individual investors would benefit from the clarity, consistency, and uniformity of a national standard.”
Taft is also the Chairman of SIFMA’s Private Client Group Steering Committee, which represents a large cross section of global, regional, independent contractor, and small financial services firms that provide services to individual investors all across America.
Taft’s full testimony can be found at the following link: http://www.sifma.org/legislative/testimony/pdf/JohnTaft-Testimony-beforeHFSC.pdf.