June 28, 2010 / 4:53 PM / 7 years ago

RBC broker exec: SEC fiduciary rules must bend

NEW YORK, June 28 (Reuters) - As Wall Street braces for a tougher set of customer care rules from the Securities and Exchange Commission, brokerage executive John Taft says investors and the market would suffer under a single-standard approach.

Congress may have hammered out a final regulatory reform bill on Friday morning, but the real work of drafting new rules and standards has been left to the SEC following a six-month study, said Taft, chairman-elect of the Securities Industry and Financial Markets Association and chief executive of the Royal Bank of Canada’s (RY.TO) U.S. wealth management business.

What brokerages want, he said in an interview, is a set of rules that account for the many activities and services they provide, from trade execution and financial planning to insurance and lending.

    “A one-size-fits-all solution does not work,” Taft told Reuters on Monday. “The people who are advocating a one-size approach to the fiduciary standard only offer one size. They’re investment advisers.”

    SIFMA last year came out in favor of applying a fiduciary standard to anyone who provides personal financial advice to individuals, whether they are licensed as brokers or investment advisers. In simple terms, a fiduciary standard means brokers need to put the interests of their clients first -- ahead of the broker’s or the firm’s interests.

    Taft contends that when the SEC gets to work on drafting the actual rules of the road -- and Taft says there is no question a fiduciary standard is coming -- it ought to take into account the different ways clients work with brokers.

    “You’ve got to change” the standard, Taft said. “It’s got to be different.” (Reporting by Joseph A. Giannone, editing by Matthew Lewis)

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