It sounds like “inside baseball” or too hopelessly arcane to be interesting or important, but it is.  Do you believe a stockbroker should tell you the total fees he is charging you?  Or not?  Do you believe that a stockbroker should tell you when he has a conflict-of-interest with you, such as selling you a mutual fund that sends he and his wife to Hawaii for a week, instead of a better fund that does not send him to Hawaii?  Or not?

Registered financial advisors tell you these things, but stockbrokers do not.  Financial advisors are held to a “fiduciary standard” whereas stockbrokers are held to a “suitability standard” which is a much lower standard.  Stockbrokers cannot simply “cheat” you, but they don’t have tell the full truth either.

For at least ten years, financial advisors have been urging the S.E.C. to make the fiduciary standard apply to stockbrokers, who have fought this vigorously.  They don’t want to be held to the higher standard, as it will be more difficult to monitor compliance, and they will therefore have to “dump” small accounts.  Or, so they threaten.

Frankly, I had been losing interest in this debate, but then an 800-lb-gorilla suddenly got involved.  President Obama has come out in support of the fiduciary standard, at least for retirement accounts.  While I’m surprised he was even aware of the decade-old debate, all I can say is . . . thank you, Mr. President!