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RDB In The News
Merril Hirsh Quoted In Registered Rep Article On SEC’s RAND Report
2/1/2008
RDB partner Merril Hirsh was quoted in “Do Your Clients Know Who You Are?”, an article discussing the RAND report released by the SEC in early January. According to the article, the report highlighted the fact that “consumers don’t know the difference between registered reps (who have a suitability standard of care) and RIAs (who have a fiduciary duty).” This confusion of roles between registered reps and professional RIAs was a cornerstone of a March 2007 U.S. Court of Appeals decision against the SEC and in favor of the Financial Planning Association (FPA). Mr. Hirsh, the lead attorney for the FPA in the case, argued that the SEC’s Rule 202, the Broker-Dealer Rule, “blurred the distinction between brokers and advisors, which matters since advisors have a fiduciary standard of care; reps, on the other hand, have suitability standards, which are lower,” according to the article.
“‘There is nothing inherently evil about being a salesman, but it is different,’ Hirsh says. ‘The problem is, if you’re going to somebody for advice, they ought to be giving you advice – not just selling you on something. It is understanding what hat the person is wearing that is so difficult.’”
Read more about the firm’s involvement in the case, which led to the annulment of the SEC Broker-Dealer Rule.
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