AARP, consumer groups want strong financial fiduciary standard

Consumer advocates, seniors and investors are urging the Senate to toughen restrictions on brokers and insurance agents as part of financial overhaul legislation.

The groups want Congress to require the Securities and Exchange Commission (SEC) to adopt rules mandating that broker dealers and insurance agents act in the interest of their clients when they give financial advice. They are supporting an amendment from Democratic Sens. Daniel Akaka (Hawaii) and Robert Menendez (N.J.).

The groups say they are pushing for the same standard that investment advisers have under current law. The pending Senate legislation requires the SEC to study new regulations, but not adopt new rules.

The groups include the AARP, Consumer Federation of America, National Association of Secretaries of State and North American Securities Administrators Association.

"The language in the current bill may be no better than the status quo, and will not serve to protect investors from biased investment advice," the groups wrote. "It wastes SEC time and resources studying issues that have been studied extensively, and does not provide the agency any authority to address a known disparity in the protections that apply when brokers give investment advice, delaying indefinitely any actions to address this pressing concern."