WASHINGTON -- The SEC is working on a fiduciary rule for financial advisors, but the regulator is in no rush to get it done – which has left fiduciary advocates feeling like they are waiting for Godot.

Chairwoman Mary Jo White, speaking at SIFMA's annual conference, said the SEC is working on a rule, but declined to provide a timeline, saying it's "not a short, quick uncomplicated rule making."

For industry observers, this is a case of déjà vu.

In 2013, White told attendees at another SIFMA conference that a fiduciary rule was a "high priority," but declined to specify when the rule would come.

“I don’t have a timeline,” she said. “I want to get real traction so we can decide what to do.”

And last year, White, speaking again at a SIFMA conference, said it was "enormously important," yet declined again to provide a timeline. She also rebutted criticism that the SEC was sluggish, saying criticism came with the territory. White has been chairwoman since 2013.

The regulator has moved too slowly for fiduciary advocates. Barbara Roper, director of investor protection at the Consumer Federation of America, says her organization has called on the SEC to craft a fiduciary rule for years.

"Meanwhile, investors continue to pay excess costs, suffer below par returns, and take on unnecessary risks as a result of non-fiduciary advice from broker-dealers who are permitted by the SEC to hold out as advisers even as they are regulated as salespeople. So, yes, I’d say the SEC has been too sluggish in crafting a rule," Roper says.

The SEC has been authorized to craft a fiduciary rule for financial advisors since Dodd-Frank passed in 2010.

"It is important to note that this is an unprecedented period of rule making. We have about 100 rules makings under Dodd Frank," White said at this year's SIFMA conference.


The SEC's deliberateness, or slowness depending on one's point of view, stands in contrast to the Department of Labor's effort to craft a fiduciary rule affecting advisors and plan sponsors providing certain kinds of retirement advice.

The Labor Department started its rule-making process in 2010. It pulled back on its first proposal, but issued a new one earlier this year that was met with fierce opposition from firms and lobbying groups. But it's also had support from some other investor advocates as well as other industry players, such as the CFP Board and Financial Planning Association.

The proposed rule is currently under review. Industry insiders expect the Labor Department to implement a version of it next year.

"The difference is that DoL has persisted despite that industry resistance, while SEC has used that industry resistance as an excuse for inaction," Roper says.

The Financial Planning Coalition, which includes the CFP Board, FPA and NAPFA, is curently focused on making sure Congress doesn't delay the DoL's fiduciary efforts, a spokesman said.

The coalition also "remains hopeful that the SEC will move forward with promulgating a fiduciary standard as they were expressly authorized to do by Congress."

Speaking at this year's SIFMA conference, White told attendees that the SEC has provided technical assistance to Labor Department officials regarding their proposed rule.

"We are of course separate agencies with different mandates," White said.

In reference to the SEC's efforts, she said that the danger in crafting a fiduciary rule is that if poorly done, then it could deprive investors of "reliable, reasonably priced advice."

Kenneth E. Bentsen, Jr., SIFMA, which has opposed the Labor Department's efforts, welcomed her comments.

"We appreciate Chair White underscoring the complexity of creating a uniform fiduciary standard for all financial professionals providing investment advice to retail customers," Bentsen said in a statement.

SIFMA supports the creation of a best interest standard, which fiduciary proponents says falls short of the protection investors need.

"Given the complexity of the issue and the potentially harmful impact on investors if regulators don't get it right, we urge the Department of Labor to re-propose its fiduciary rule, so that all stakeholders may take another look before it becomes final," he said.

White told SIFMA attendees the regulator will move "as expeditiously as we can," but declined to specify when a rule may be forthcoming.

The SEC did not respond to additional requests for comment.

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