Andrew Melnick

Document Type




This Article briefly traces the content and sources of the standards governing the conduct of investment advisers and broker-dealers. This Article then summarizes the key elements and recommendations of Dodd-Frank and the SEC Staff Study, and describes the competing visions offered by SIFMA and the Consumer Federation of America coalition in their respective letters to the SEC. This Article concludes with a few observations about particular areas—specifically on the meaning of “personalized investment advice” and the provision of ongoing advice and the duty to monitor—that the SEC should consider providing detailed guidance on. Depending on the final rules formulated by the SEC, the imposition of a uniform fiduciary standard applicable to broker-dealers can represent a sea change in how broker-dealers conduct their business, requiring an overhaul of the current model and a massive investment in technology, personnel, and training; or it can represent an incremental change, one that enhances investor protection and reduces investor confusion while allowing the broker-dealer model to continue to offer investors a wide array of choices of services and products at a range of pricing options.



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