Seven groups representing state securities regulators, investors, and investment advisers are urging leaders of the Senate Banking Committee not to water down language in its draft financial regulatory reform legislation that would require every individual that provides investment advice to be held to a fiduciary duty under the Investment Advisers Act of 1940.

In a letter sent yesterday to Senate Banking Committee chairman Christopher Dodd, D-Conn., and the panel’s ranking Republican, Richard Shelby, R-Ala., the groups said they strongly favor a provision in the committee’s draft bill that, “in a straightforward and sensible fashion,” would eliminate exclusions from the act’s ­fiduciary duty that currently exists for broker-dealers acting as investment advisers if their IA work is “solely incidental” to their brokerage ­activities.

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