Former SEC Chiefs "Embrace" Fiduciary Standard For Brokers, But Differ On Specifics Hot

Harvey Pitt, Arthur Levitt, and David Ruder -- all former SEC chairmen -- broadly agree that brokers need to put their clients first.

After all, they say, that's the level of service clients think they're getting.

Pitt in particular says that any financial professional who is doing more than merely taking orders needs to play what is effectively a fidicuary role.

The question is how the SEC enforces this policy.

Commission-driven advisors have protested that they would love to put their clients first -- and have in fact already embraced a fiduciary standard for themselves -- but in a way that supports their business model.

Presumably that means that if everything else is equal, commission products would cost retail investors roughly what they would pay in management fees: maybe 1% of their account balance a year.

Otherwise, the client might be able to get a better deal elsewhere and, if his or her interests come first, should be told of this. Or if the advisor offers better value, this needs to be communicated in a way that everyone understands.

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