Letters to the Editor: Statutory best interests standard needed

RE: Advisors are already bound by a fiduciary duty, by Greg Pollock, president and CEO, Advoics, investmentexecutive.com, June 11, 2015

Advocis president Greg Pollock argues there’s no need for a statutory best interests duty because all investment advisors already are bound by a common law fiduciary duty “where the facts warrant it.” He’s right about one thing: courts impose a fiduciary duty only in some circumstances. But investment professionals should have to act in their clients’ best interests all the time, not just sometimes. And investors need to know up front that all the advice they receive will be based on what’s best for them in every instance, not just when someone else decides afterwards that “the facts warrant it.” On this critical point, the common law fiduciary duty is outmoded and inadequate. That’s why it needs to be replaced with a statutory best interests duty.