While U.S. brokerage firms may be relieved by the political gridlock currently stalling rule-making on a uniform fiduciary standard for registered representatives and investment advisors, they do need to reckon with FINRA’s new suitability rule, FINRA 2111 (see this Investment News article). Preliminary research on how firms are complying with the new suitability rule, which went into effect in early July of this year, shows that brokerage firms may not be doing enough to effectively meet these new requirements. The rules require advisors to:
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Last September, I wrote an Aite Group report that, among other things, suggested that developed-country policymakers had a rare opportunity to draft bold solutions for the capital markets, which today are the victim of a messy and dangerous financial integration initiated during the early 1990s. One of the solutions that I advanced called for parsing today’s integrated complexity to limit cross-asset-class contagion.
I’ve been talking with some top lenders about what they are budgeting and envisioning for credit IT between 2013 and 2015, and I am seeing a recurring theme that goes something like this: Small-business owners don’t want to borrow. Period. But instead of chalking this lack of borrowing up to the economy, I think that maybe something else is going on. Is the retail business for non-essentials -- structured as we know it today -- dying? And if it is, could the Internet be to blame? Are retail businesses afraid to borrow or start up because they see dwindling traffic and revenue? Even with a suddenly strong economic recovery, are they convinced that the poor results will continue?
I’ve spent the lion’s share of this week hanging out with the clearing and settlement crowd at TradeTech Post Trade in London, chairing various sessions on industry trends. If there was one thing to be gleaned from the event, it was that collateral management is one area that all players in the capital markets have a vested interest in getting a better handle on. One of my collateral optimization stream panels, for example, saw buy-side and sell-side representatives (including those in the audience) hotly debating who has access to the “high-quality assets” required to be held as collateral, as prescribed by the incoming alphabet soup of regulations and for clearing.
The first thing that you should know is that two years since the passage of the Dodd-Frank Act, purple-state individuals lack confidence on U.S. stock markets at a significantly higher rate than do blue- or red-state respondents. What’s more, Aite Group doubts that the prevailing negative attitude among retail investors will change much as Dodd-Frank becomes fully implemented. In a recent report, Aite Group published findings from two U.S. investor surveys -- one of 1,014 respondents in December 2011 and one of 644 respondents in August 2012. From the latter, we gathered these insights from purple-state respondents: