August 12, 2010
I strongly urge you NOT to impose a fiduciary standard on my way of doing business as a financial advisor.
I have been providing insurance and investments to clients for over 14 years and am licensed to sell life insurance and securities products in several states. Most of my clients are small businesses that are not in a position to pay me a separate fee as would be required under such a standard.
I have grave concerns over the impact that a fiduciary standard of care will impose on my way of doing business. The presumption that a fee-based financial advisor is providing better and unbiased advice is seriously flawed. My advice to my client is the same regardless of how, or if, I am paid.
I already work in a highly regulated environment. My business is subject to inspection by a host of regulatory authorities, including the Texas Department of Insurance and FINRA. My broker-dealer provides considerable oversight. And because I sell and service employee benefit plans I must also comply with DOL, IRS and HIPAA regulations. A significant part of my and my administrative assistant's workload deals with the constant and considerable attention to compliance issues. A likely result of the imposition of a fiduciary standard instead of a suitability standard will be a change in the way I do business. My cost of doing business will increase, my liability will increase, and I will likely have to pass these costs on to my clients in the way of fees.