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Uniform fiduciary standard

By Sheyna Steiner ·
Monday, January 24, 2011
Posted: 9 am ET

On Friday, the Securities and Exchange Commission delivered their study on the standards of care for providers of investment advice.

After six months of study, the SEC recommended a uniform fiduciary standard for broker-dealers and investment advisers "when providing personalized investment advice about securities to retail customers," the report stated.

The study recommended that the new standard of conduct "for all brokers, dealers, and investment advisers, when providing personalized investment advice about securities to retail customers (and such other customers as the Commission may by rule provide), shall be to act in the best interest of the customer without regard to the financial or other interest of the broker, dealer, or investment adviser providing the advice."

Conflicts of interest must be disclosed or eliminated, but, the study points out that the commission-based model under which many brokers work does not violate the fiduciary standard.

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