With the uncertainty as to what to expect from the SEC’s new fiduciary standard to be set for defining the financial advisor’s role on behalf of clients, Morgan Stanley Smith Barney is moving beyond just “buzzing” about the “what if’s”…
At last week’s Securities Industry and Financial Markets Association conference in NYC, Anne Cooney, general counsel in MSB’ legal and compliance department , told other panelists in attendance that despite not knowing how or when the new rules will take shape, MSB was already working thru different scenarios that may arise.
[pullquote]All of you should start hugging your IT people![/pullquote]
One of the biggest questions on the table is what level of communication wirehouses must offer to the different brokerage accounts including those that only use the firm’s call center, some with small balances and some with heavy stock concentrations from an employee’s company, not to mention those within the traditional advisory framework.
And what about the “hybrid” account where an advisor is expected to give advice on part of the account, with the investor controlling part of the brokerage trading? Will the fiduciary standard be the same for each type of account?
A whole other concern centers on disclosure and which rules apply and when and just how a firm is to measure and supervise compliance of all of these issues!
Just WHEN the new draft fiduciary rule from the SEC will be out, is up for debate with a feeling that this fall will be the earliest, and some predicting that it will come no earlier than 2013 (per Ronald Long, director of regulatory affairs for Wells Fargo Advisors and another panelist at the conference).
All said and done, what changes come and when they come, all panelists agreed that significant technology and operations overhaul were inevitable because nobody will be able to keep up with the onslaught of new rules many of which will be within “tight timeframes.” As Wells Fargo’s Long added…”All of you should start hugging your IT people!”