Securities and Exchange Commissioner Michael Piwowar hasexpressed doubts about the need to expand the “standard of care”fiduciary obligation to retail brokers.

“It is not clear that changes in the regulations applicable tobroker-dealers and investment advisers are necessary, including theadoption of a uniform fiduciary duty,” the Republicancommissioner said in an address last week to the National Associationof Plan Advisors.

Comments by Piwowar’s fellow commissioners suggest that a voteon expanding the fiduciary standard could be split between twoDemocrat commissioners in favor of moving ahead and two Republicancommissioners leaning against it. SEC Chairman Mary Jo White,who is the fifth commissioner on the panel, said one of herpriorities this year is to bring the panel to a decision on whetherto proceed.

While insisting he has not yet made his decision, Piwowar didacknowledge that retail investors are confused about the duties ofbroker-dealers and investment advisors.

"As demonstrated by the endurance and passion of arguments on allsides, this question is not just really hard to answer. It isreally, really,really hard – with three reallys,” he said at the start ofhis remarks.

Registered investment advisors are compensated on a fee-basis,and are beholden to the fiduciary standard of care under ERISA.Brokers traditionally have been compensated by commissions on salesof securities, and are not subject to fiduciarystandards.

While brokers are not regulated as fiduciaries, they arerequired by both the SEC and FINRA to “deal fairly” with theircustomers. That includes a suitability obligation, which requiresbroker-dealers to recommend options consistent with the investmentprofile of their customers, Piwowar said in his preparedremarks.

They are also already required to disclose material conflicts ofinterest, he said.

Proponents of an industry-wide, uniformfiduciary standard argue the existing regulations for brokers aretoo soft.

Piwowar suggested the contrary, citing regulatory actionsbrought by FINRA over the past year and a half. “As of thisSeptember, these actions have resulted in a total of approximately$7.1 million in fines assessed against 25 firms,” saidPiwowar.

FINRA, which is funded by the industry it regulates, has alsobarred 20 registered brokers and suspended 53, and ordered $4.8million in restitution payments to investors.

“Before adopting any new rules or rule amendments, thecommission has to consider what are the marginal benefit and whatare the marginal costs,” he said.

Piwowar said he wasn’t “aware of any evidence that retailinvestors are systemically being harmed or disadvantaged under oneregulatory regime as compared to the other.”

He also pointed to bipartisan concerns in Congress that acomprehensive fiduciary standard could create new costs andliabilities that may price middle- and lower-income workers out ofthe market.

Members of the Congressional Black Caucus, along with members ofthe Congressional Hispanic Caucus and a member of the CongressionalAsian Pacific American Caucus have voiced concern that a uniformfiduciary standard could create a barrier to qualified retirementplanning.

“I share these serious concerns about investors potentiallyhaving limited financial advisory options or being locked out fromreceiving investment advice altogether,” said Piwowar.