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"The reform plan would impose a fiduciary duty on brokers when they give investment advice, forcing them to provide a reasonable basis on why their investment advice is the best for their client and disclose any conflicts of interest.
Furthermore, most contracts currently signed with investment advisers or brokers generally strip an investor's right to take a dispute to court, forcing the investor into an industry-run arbitration. The reform bill would give the investor the option of a court proceeding or arbitration."
While I personally was not thrilled with the power the Consumer Financial Protection Agency would have because I thought it would be too overarching, this would be ideal. Avoid those conflict of interests and give some recourse when there are legal misdoings. I was surprised to learn that the only recourse investors had previously was industry-run arbitration, which is silly and gives them no chance.
What other areas of reform do you think are most important to everyday people? This is an interesting topic that we have not dealt with a whole lot. (I think)
I don't find myself disagreeing with any of this. A lot of these changes are of the "duh" variety in my opinion. Of course transparency is a good thing.
ReplyDelete-Tommy
I like the ideas they've out forward here but it really just doesn't seem like these are earthshaking reforms that are going to have a big impact on the financial system. Hopefully this is just one baby step on the road to further reform that takes some of the power away from the banks...
ReplyDeleteI think that it will be interesting to see how this reform actually effects the financial system. It does seem like these new standards are kind of obvious changes that probably should have been established earlier. The investment regulations I think are a necessary change, with consumer confidence not fully recovered from the crisis and a lack of trust in the financial service industry it seems like some more liability on the service industry will help realign incentives.
ReplyDeleteI think the investment regulation on the new reform are a great thing but none of the things in here are that shocking that they are changing. Its something that should have always been there.
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