You know that prospectus you get when you buy into a mutual fund or make a stock purchase -- the one that's as thick as a Russian novel and reads like an IRS handbook?
Regulators implementing Dodd-Frank are targeting it this year, Barr says.
"You usually get (disclosures) three days after the sale, which is three days too late," Barr says. "Much better, upfront disclosure, much clearer disclosure of the true costs of fees, churning and the like are now authorized under Dodd-Frank."
In another facet of financial reform, the Securities and Exchange Commission will craft a fiduciary standard for stockbrokers similar to that for investment advisers, says Barr. Such a standard could make brokers a little more careful in making investment recommendations in the future.
That's because a fiduciary standard requires an adviser to recommend investments that are in the "best interest" of a client. Previously, brokers could recommend investments that were only "suitable," which sometimes led to stockbrokers steering clients toward investments that were a poor fit for their clients but meant larger fees and commissions for them.
Under such a fiduciary standard, brokers who fail to recommend investments that are in the best interest of a client or fail to disclose conflicts of interest could find themselves liable for damages, just as investment advisers sometimes are now.