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The
initiative, known as "Retirement-Targeted Industry Reviews and
Examinations (ReTIRE), comes as the U.S. government is ramping
up protections for retirees.
The Labor Department in April proposed new rules that would
require brokers offering retirement advice to put their clients'
best interests first. SEC Chair Mary Jo White has said the SEC
should proceed with its own best-interest rule for the industry.
Financial advisers are required to act as fiduciaries, putting
their clients interest ahead of their own, but brokers only need
to recommend "suitable" products for retail investors.
The Labor Department is concerned this legal distinction might
confuse investors, and lead brokers to sell inappropriate
products to line their own pockets.
The SEC said its examiners will focus on "certain higher-risk
areas of registrants' sales, investment, and oversight
processes, with particular emphasis on select areas where retail
investors saving for retirement may be harmed."
The SEC will also make sure firms are making appropriate
recommendations for retirees and disclosing conflicts related to
their compensation structures and personal relationships with
service providers.
Other review areas include supervision and compliance controls,
as well as marketing and disclosures toward retail investors.
(Reporting by Sarah N. Lynch; Editing by Richard Chang)
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