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(Updated) Groundbreaking SEC study would smash old regulatory system, creating fiduciary brokers and more regulated advisors

Controversy and conflict emerge as SIFMA, Schwab and others begin to react

Author Elizabeth MacBride January 24, 2011 at 3:16 PM
2 Comments
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Bill Crager of Envestnet: "There was a lot of momentum toward the fiduciary standard. Now the implications find their way throughout the industry."

TAMPs


Jeff Spears

Jeff Spears

January 23, 2011 — 1:27 PM

Sure looks like the SEC got it right! While most of the pre-release coverage had focussed on the flaws in the B/D model the study recognizes that there are items that need to be improved in the RIA business model too.
I’ve worked in both business models and couldn’t agree more with the SEC study.
Bravo

Stephen Winks

Stephen Winks

March 12, 2013 — 8:11 PM

Commissioners Casey and Paredes call for yet another study illustrates they have not been paying attention to the substance of the fiduciary debate. It has been long established and agreed by both advisor and brokerage interests that brokers are neither accountable nor have ongoing responsibilities for their recommendations. Thus by definition, brokers don’t know whether they add value or not by design, inorder to mitigate fiduciary liability. Broker/Dealers neither acknowledge nor support the fiduciary standing of their brokers. Thery do not even acknowledge their brokers render client specific advice which is a fiduciary act. None of the necessary enabling resources (prudent process, advanced technology, work flow management, more sophisticated approach to portfolio construction, conflict of interest management) are in place for it to even be possible for brokers to know whether they add vaslue or not.

What Casey and Paredes don’t understand is the level of counsel a broker can provide has been crippled by the insistence of brokerage interests who would like to perpetuate the industry stasis of 1940 before ERISA, Modern Portfolio Theory, the Internet and advances in investment analytics and portfolio construction were advanced. Today, modernity requires an unprecedented level of counsel which is easily is possible but thwarted by brokerage interests..The brokerage industry must evolve from selling investment products with no accountability or responsibility, to expertly addressing and managing investment and administrative values for each client as required by fiduciary standing and statute.

SCW.


Related Moves

February 24, 2024 at 3:33 AM

Bill Crager is dropping CEO role after multiple shoes dropped; the company insists it was his 'decision' but vision, Yodlee future uncertain

The co-founder of the $5.3-trillion AUA outsourcer of software and investments was pressed to take the job under the most adverse circumstances, then second-guessed by stakeholders as he managed the cards he was dealt.

January 9, 2024 at 4:09 AM

Bill Crager makes critical hire of 'step back from the numbers,' Joshua Warren, replacing 'brother' Pete D'Arrigo at CFO; Warren had a big role at BlackRock -- Envestnet's biggest stakeholder

The Envestnet CEO gets 'very, very impressive' 43 year-old BlackRock exec; the New York asset manager happens to be Envestnet's largest stakeholder.

September 27, 2023 at 2:48 AM

Bill Crager shuffles the deck on management team created just seven months ago: Tony Leal is out of 'Big Three' inner circle, replaced by Morgan Stanley vet Rose Palazzo

The RIA software 'trailblazer' and co-founder of MoneyGuidePro has been working on departure for a year; will transition to a 'consultant,' company says

January 7, 2023 at 1:50 AM

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Mentioned in this article:

Envestnet Inc
TAMP
Top Executive: Jud Bergman



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