Stirring the pot: Should the SEC put a lid on pay?
It’s the old Watergate adage, whispered in that dark garage, that has governed a lot investigative journalism. I think it’s one that investors should follow, too, to protect their own interests.
It is: Follow the money.
The Obama administration’s proposals to broaden the Securities and Exchange Commission’s powers include a provision that follows the money.
The SEC could write rules to ban brokers or investment advisors from receiving pay that is unfair or compensation that stacks the deck against the investor, such as bigger commissions for selling this in-house mutual fund rather than one from an outside company that might be better for the customer.
But the SEC gets to decide which pay practices it could regulate and what is fair or unfair.
So could it ban broker commissions? Should it?
Should it set maximums for fees for investment advice?
What should the SEC do about pay?
Would regulation of pay help investors get better advice?POSTED IN: Your Money (256)