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Fund Spy

Fiduciary Rule Should Be Largely Positive for Investors

In a comment letter to the SEC, Morningstar’s Aron Szapiro explores what changes the fiduciary rule has had on the asset management industry and what the SEC can do to help investors.

Although most of the attention around the future of the fiduciary rule has centered around what changes the Department of Labor might make, the SEC could also play a crucial role. Since 2010, the commission has had the authority to create a "uniform advice standard" which could apply to both retirement and nonretirement accounts. While we don't expect the SEC to promulgate a rule imminently, the DOL has pledged to work closely with the SEC on any modifications to the fiduciary rule.

New SEC Chair Jay Clayton has started the process of examining this issue by asking for responses to a series of questions about rules governing how broker/dealers and registered investment advisors can give advice. Morningstar took the opportunity to share our views on the best path forward in a letter submitted to the chair this week. The text of the letter is below and a PDF version is available here.