FINRA Wants ADV for Broker-Dealers
In a recent speech to SIFMA, FINRA Chairman and CEO Richard Ketchum called for a broker-dealer ADV that discloses information not just about specific products but also about brokerage services. In particular, Mr. Ketchum would like such disclosure to include information about “the conflicts of interest that a broker faces when she offers any services to her customer” thereby allowing a customer to make an informed investment decision. Mr. Ketchum indicated his support for such a broker-dealer disclosure document whether or not Congress imposes a fiduciary standard on broker-dealers.
OUR TAKE: Once a broker-dealer must disclose all conflicts of interest, FINRA will hold the BD accountable for any undisclosed conflict of interest. This is a back-door fiduciary standard imposed whether or not Congress acts.