New rules for brokers

New rules for stockbrokers who advise clients on retirement investments will take effect late this month. The new standard, adopted by the Securities and Exchange Commission, has drawn criticism from some advocates who say it doesn’t adequately protect investors.

The new standard requires brokers to disclose their potential conflicts of interest to clients when they give investment advice — but not to eliminate those conflicts entirely.

Hundreds of billions of dollars in Americans’ retirement savings could be affected. Under the new rules, brokers won’t be allowed to use the

Stricter rules for

brokers are about to begin. Critics say they do not go far

enough.

IRAs

$35 trillion 30

25

20

15

10

5

0

’15 term “adviser” in their name or title when dealing with retirement investments. And brokerages must eliminate sales contests and quotas that reward brokers who generate the highest sales of certain investment products.

The rules, adopted a year ago, were supported by the financial industry. Critics say a stricter standard that had advanced under the Obama administration should apply to brokers as well as to financial advisers. This standard, called the “fiduciary duty rule,” required all financial professionals — including brokers — to act as trustees who must put their clients’ interests above their own.

Defined contribution* Private pensions Govt. pensions Annuity reserves

’16

’17

’18

’19

’20(Q1)