June 5 2019



Herb Perone
Investment Adviser Association

IAA Initial Statement on SEC Adoption of Final Standards of Conduct Rules Package

Washington, D.C. (June 5, 2019) – Following is the statement of Investment Adviser Association President & CEO Karen Barr on the SEC’s adoption of final standards of conduct rules and interpretations:

Today’s rulemaking will not alter the investment adviser’s special relationship of trust and confidence with its clients. As fiduciaries, investment advisers continue to have an affirmative duty of care, loyalty, honesty and the utmost good faith to act in the best interests of their clients. These high standards will remain at the core of an investment adviser’s relationship with its clients. They have served investors, the capital markets, the economy, and our profession well for decades and will continue to do so.

The IAA has steadfastly maintained that a new interpretation of the Investment Advisers Act Fiduciary Duty is unnecessary because that duty is widely understood and established in law, regulation and professional practice. While we are pleased that the Commission seems to have made several of the clarifications we requested to the proposed interpretation, we would be disappointed if the Commission dropped the most effective, widely used, and straightforward articulation of the fiduciary duty – to put your client’s interest first at all times – an articulation that has long framed fiduciary duty.

We are encouraged by the descriptions of some of the changes we heard this morning relating to Form CRS and Reg BI. However, we are concerned about the scope of the “solely incidental” interpretation. It also remains to be seen whether this combined package will significantly alleviate investor confusion.

We look forward to reading the releases in detail when they are published.

About the Investment Adviser Association

The Investment Adviser Association (IAA) is the leading trade association representing the interests of SEC-registered investment adviser firms. The IAA’s more than 650 member firms collectively manage assets in excess of $25 trillion for a wide variety of institutional and individual investors. For more information, visit www.investmentadviser.org or follow us on Twitter, LinkedIn, and YouTube.