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The only dissident commissioner, Robert Jackson, an independent who occupies one of the Democratic seats on the commission, said in an interview: "Does this rule require the interest of the clients first and foremost? is not the case. "
Mr. Clayton, the president of the agency, challenged this characterization.
The rules will require brokers to "act in the best interests of their retail clients when making a recommendation, including not placing their financial or other interests ahead of the retail client's interests," he said. he declares.
It will take some time for experts to fully understand the changes exposed and even longer to see how they could change the brokerage landscape in practice. The section on best interest regulation alone has 771 pages, and lawyers, academics and consumer advocates are still analyzing and digesting language. Even then, industry officials were comfortable announcing the rules, which will come into effect 60 days after being published in the Federal Register.
Kenneth E. Bentsen Jr., President and Chief Executive Officer of the Securities Industry and Financial Markets Association, the trade group for large financial services companies, said the rule would impose a much stricter standard of conduct on brokers.
"Implementation costs will undoubtedly be important," he said, but it is worthwhile "to consistently improve investor protection to the level investors should and should not be. wait".
It can be difficult for investors to know where the loyalty of professionals – especially brokers – lies. Heather Heckel, 33, art teacher at a college in Port Washington, NS, previously worked in Manhattan.
A broker left notice in the mailbox of Ms. Heckel's school regarding the investments he sold in the pension plans, known as 403 (b), which are similar to those in 401 (k). ). She agreed and the broker transferred her retirement savings from a guaranteed investment to 7% – an extremely rare investment, available to public school teachers in New York City – and transferred her into an annuity with an annual rate of more than 2%. According to Morningstar, the average investor was paying fees equal to more than four times the fees that he charges for his mutual fund type investments.
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