(Bloomberg View) — What's in a name? In the world of financial advice, plenty. That world is divided into two categories: brokers who work on commission and advisers who work for fees. For decades, they've been at war over who better serves retail investors.
The Barack Obama administration may soon come down mostly on the financial advisers' side, and for good reason: They have a legal duty to act in clients' best interests — unlike brokers, whose job is to sell.
It would be highly controversial for Obama to impose the higher legal standard, called a fiduciary duty, on brokers. Wall Street will hate the requirement that brokers act solely in a client's interest or risk getting sued, and will probably ask Congress to overturn it. But lawmakers should take note: It would help millions of savers, ease the U.S.'s retirement time bomb and aid the broader economy.
America's retirement gap
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