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SEC Invites Investors to Speak Out About Bad Financial Advice

Commission holds roundtables to review its proposed rule to prevent hidden fees and conflicts of interest

S E C Commissioner Jay Clayton

Tom Williams/CQ Roll Call/Getty Images

Investors have a chance to tell SEC Chairman Jay Clayton and other SEC officials what they think of the draft rules the commission introduced earlier this year.

En español |  Investors who want to make sure they aren't losing money because they received bad financial advice will get the chance this summer to tell the Securities and Exchange Commission (SEC) how it should better protect consumers.

The commission will continue its series of roundtable meetings, where ordinary investors are encouraged to tell Chairman Jay Clayton and other SEC officials what they think of the draft rules the commission introduced earlier this year. The proposed regulations would require brokers and other financial advisers to disclose commissions, fees and conflicts of interest to clients upfront. The SEC rules would govern securities but not other types of retirement investments, such as most 401(k) plans and IRAs.

The SEC meetings will be held on July 12 in Washington, D.C., July 17 in Philadelphia and July 25 in Denver. The SEC wants to hear from retail investors who work with a financial professional and have no affiliation with the financial services industry. The commission has more information online about how to RSVP for one of these meetings. The SEC already has held roundtables in Atlanta, Houston and Miami.

"It has been incredibly informative and gratifying to talk with investors in their own backyards about their expectations regarding relationships with their investment professionals," says Clayton. "Our proposed rules are intended to match our rules with investor expectations, and it is crucial that we hear directly from the investors themselves on how we can best ensure that result."

AARP and other consumer advocates worry that the SEC's proposed rules may not be strong enough and have suggested changes to make them more effective.

"The SEC roundtables are a valuable opportunity for retirement savers to voice their opinions," says Cristina Martin-Firvida, AARP’s director of financial security and consumer affairs. "We know through many years of working on this issue and consumer feedback that investors do not understand the different legal standards, or the disclosure forms that apply to different types of financial professionals, so we need to ensure that the forms have clear language."

The SEC is accepting public comment on its draft rule through Aug. 7. Those who are unable to attend one of the roundtables in person can share their insights with the commission through AARP's action page or by going to sec.gov/Tell-Us.

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