FINRA chief Richard Ketchum walked back some of his organization's criticism of the Labor Department's fiduciary rule on Friday, saying that the revised final regulation is a marked improvement from the earlier version.

"I think the final rule is much better," Ketchum said at an event at the Brookings Institution, a Washington think tank.

Ketchum credited the DoL for making "major steps forward" in allowing for more operational flexibility under the fiduciary rule, including the explicit permission for advisors to recommend proprietary products and some modifications to the best-interest contract exemption.

Ketchum's group had been sharply critical of the DoL's original proposal, warning that it would further muddy an already convoluted regulatory environment. He argued instead that existing securities laws would be the more appropriate venue for ensuring that advisors act in their clients' best interest.

But Ketchum praised the department for keeping an open door throughout the process of revising the rule and responding to some of the objections that analysts and industry representatives had raised. He also indicated last month that he felt a fiduciary standard made sense, in an exclusive interview with On Wall Street.

As brokers and advisors digest the impact of the fiduciary rule, Ketchum said he is hopeful that the DoL will continue the dialogue with the industry and provide more clarifying guidance in areas like the types of compensation structures that are permissible under the regulation.

"I'm hopeful that, given the responsiveness that DoL's had in the last few months, that interacting with the firms they'll be able to provide greater guidance there," he said.

Ketchum also made a broader appeal for harmonizing the regulatory environment through an SEC action to set a uniform fiduciary standard that would apply in equal measure to advisors and broker-dealers, requiring both to act in the best interest of their clients. With the DoL rule, he lauded the goal of trying to bring investment advice to a higher standard, but cautioned that the new rules would backfire if they compel some advisors to cut off service to lower-income clients, as critics have warned.

"I strongly believe that we need to move to a fiduciary environment where there's clarity that the best interests of customers are put first," Ketchum said. His concern is that customers should not be made to feel they must either be self-driven or in fee-only accounts, he said. "The basic fact is for most investors, fee-only accounts are more expensive and self-driven investors—on any economic analysis I've ever done—do worse than investors that are advised."

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