Three former Securities and Exchange Commission chairmen called Tuesday for the agency to develop a fiduciary rule.
Speaking at the TD Ameritrade advocacy leadership summit in Washington, the former top SEC officials said the guiding principle should be putting clients’ interests first.
“It doesn’t matter what you are called; it matters what you do,” said Harvey Pitt, who led the agency from 2001 to 2003. “If people are giving advice, they should be held to the same standards. What we really need is just an overarching standard. The problem when it’s detailed is that lawyers and others try to craft around it,” Mr. Pitt said.
The officials noted that while the Department of Labor is developing its own updated fiduciary standard, a similar SEC effort first discussed in 2008 “is harder than perhaps it ought to be,” said Christopher Cox, whose tenure ran from 2005 to 2009. “There are enormous interests at stake here.”
Mary Schapiro, who served as chairwoman from 2009 to 2013, said she does not blame the DOL for moving forward. During her tenure, SEC officials had “hundreds of meetings,” thousands of comment letters and a task force working on a proposed rule, all of which resulted only in a study. “I feel very strongly that the SEC needs to be more forward on this,” Ms. Schapiro said.
Current SEC Chairwoman Mary Jo White is advocating for a principles-based standard, the former chairmen noted.