August 17, 2010
I am a Certified Financial Planner and Director of Wealth Advisory Serviceswith Johnson Investment Counsel, Inc. We have been serving clients for 45 years, and currently manage about $5 billion for nearly 3,000 clients. Our firm has been servicing clients under a fiduciary standard of care for our entire 45 years. I strongly urge you to extend the Advisers Act fiduciary standard of care to all financial professionals who provide personalized investment advice to retail clients.
It is unfair to consumers that the quality of advice they receive from a financial professional is dependent on the professionals registration or title. Its no wonder consumers are confused, and do not know whether their financial professional is looking out for their best interests. I can tell you from my personal experience that adhering to the fiduciary standard of care and putting my clients interests ahead of my own benefits my clients and my business.
It is clear that individuals respond to incentives, and when a financial professional's loyalty to their employer, and not their client is incentivized, consumers are harmed.
My clients recognize and understand that the advice I give them is in their best interests, because: my loyalty is to them first I will advise them with utmost good faith I will manage any conflicts of interests that may harm them and disclose those conflicts to them I get paid for the advice I give them and the investments I select for them I am required to choose from the best investments available keeping their interests first and I can charge a fee or commissions based on their needs and preferences.
Adhering to the fiduciary standard of care does not limit my ability to provide my clients with appropriate services and products. As a fiduciary, I can choose to operate in a business model that is best for my client. The key is fully disclosing, and avoiding and fairly managing conflicts of interest. Providing financial advice with fiduciary accountability does not reduce services to middle Americans. It ensures that the services consumers receive will be in their best interests -- not in the best interests of the financial intermediary or his or her company.
I consider the opposition of this Act by certain parties to be ironic as most of the damage that has been done to consumers during the past decade has been at the hands of those that do not adhere to a fiduciary standard.
I urge you to recommend to Congress that it is necessary and appropriate in the public interest and for the protection of consumers to extend the fiduciary standard to broker-dealers, who provide personalized investment advice, and to initiate a rulemaking to achieve this long overdue consumer reform.
Sincerely,
M. Jay Wertz, CFP