The BDA opposes a broker-dealer fiduciary duty because no benefit to investors has been shown, because the current rules protect investors and because a fiduciary relationship is not possible when the broker-dealer has been engaged by an investor to buy or sell securities from that investor. Further, the risk of litigation that a fiduciary duty would place on broker-dealers means that they would curtail investor services. Recent studies have demonstrated that what investors want are clearer communications from their investment professionals. Even former Financial Services Chairman Barney Frank (D-MA) has written that Congress did not intend for the Investment Advisor fiduciary duty to be applied to broker dealers. The BDA testimony is available here.
