3ethos CEO Don Trone published an article for ThinkAdvisor on what regulators should consider from the public and profession on fiduciary rule-making.
Ordinarily, Washington (including Congress and regulators) tends to allow an industry impacted by new legislation to define the details of any standards which emerge from the enabling legislation. I suspect that will be the case with the Dodd-Frank Financial Reform Bill (Reform Bill) but, to be certain, the Foundation for Fiduciary Studies (Foundation) has released the new “2010 Fiduciary Standard” to serve as an initial rallying point.
There are two operative words in developing a standard, particularly a fiduciary standard: “consensus” and “substantiation.” The public and the industry want to see “consensus,” whereas regulators and the courts are more concerned about “substantiation.” A standards developer, such as the Foundation, needs to be able to demonstrate both; that there is a consensus across the industry for the standard, and that every dimension to the standard is substantiated by either legislation, regulations or case law–or in the absence of such substantiation, industry best practices.
A link to the ThinkAdvisor complete article is here.