The Securities Industry and Financial Markets Association has urged the Securities and Exchange Commission to ask the U.S. Court of Appeals for the District of Columbia for a rehearing on the issue of fee-based brokerage accounts.
Late last month, the court ruled in favor of the Financial Planning Association in its case against the Securities and Exchange Commission, finding the SEC exceeded its statutory authority of a section of the Investment Advisers Act of 1940 which exempted broker-dealers offering fee-based brokerage accounts from registering as advisers.
“This ruling has the potential to significantly impair an important element of consumer choice for American investors and we strongly urge the SEC to ask for a rehearing,” said Marc Lackritz, president and chief executive of SIFMA. “With this decision, one million investors, with nearly $300 billion in assets, could see a significant reduction in their range of choices and options for receiving and paying for financial services. Investors deserve no less than robust choice and vigorous competition.”
Today, fee-based accounts make up about 20 percent of all retail brokerage accounts, according to SIFMA.