“It may not be a household word, but the battle over your broker’s ‘fiduciary’ role has moved in a new direction—away, some say, from a lot of clients’ best interests.”

“A major push by consumer advocates to hold stockbrokers to the same client-comes-first standard of care required of “investment advisers—the so-called fiduciary standard—seemed close to success only a year ago. That was after a study by the Securities and Exchange Commission had called for the new rules, despite brokers arguing that dispensing advice was only a part of their business model and they shouldn’t be held to the same standard as advisers in all situations.”

“The five SEC commissioners, however, never voted to change the rules. Now, the SEC is saying it won’t write any new rules until it studies how much they might cost the industry.”

“The shift largely is due to an unrelated case from last year, in which the U.S. Court of Appeals for the District of Columbia struck down an SEC rule on ‘proxy access’ that would have allowed shareholder groups to put up their own proposals and board-of-directors candidates on company-distributed proxy ballots. The court said that the agency hadn’t done a thorough review of the rule’s potential costs.”

“That changed the climate for all future SEC rule making, says David Tittsworth, the executive director of the Investment Advisor Association. ‘The SEC doesn’t want to be proposing rules that will just be struck down,’ he says.”

Read the full story here.