August 17, 2010
I am writing in support of a universal fiduciary standard. In my experience and from industry research, retail clients do not distinguish between registered representatives and investment advisor representatives. They typically form a relationship with an individual, and then rely on trust of the individual's competence and integrity to guide them in their financial decisions, often with minimal oversight. There is no reason not to protect consumers with a universal fiduciary standard, because in practice, whatever the fine print says, those with and without the title of a fiduciary are evaluated in the same light by the investing public.
In practice, registered reps. access separately managed accounts that are managed by investment advisors as an end-around to prohibitions on having discretionary control of clients' assets (related to avoiding fiduciary responsibility). This results in another layer of costs that typically run about 3% of assets, a steep price that precious few managers can surmount and is opaque to the consumer.