August 20, 2010
The suitability standards governing broker-dealers and registered representatives is already a robust and heavily enforced standard. In the process of finalizing any added or new regulations governing broker-dealers and registered representatives, the study should compare and contrast how the fiduciary standard governing investment advisers is currently being applied and enforced.
Compliance costs-both in terms of finances and time-are high, and those costs are eventually felt by clients. Adding another layer of regulation means another layer of compliance, and even more cost to clients.
Discussion should be had as to the specific licenses held and what is involved in complying with each license.
How frequently is it examined? Data should be requested of said broker dealers and registered representatives of the specific examples of how much time is spent on compliance. How much paperwork is involved? Staff is already in place whose sole job is keeping up with compliance.
What specific areas of compliance which does not add any consumer protection should also be considered and deleted.
Are the compliance compliance requirements impacting our ability to serve our clients? The SEC should also take into serious consideration the added costs of the liabilities of the fiduciary duty and how it could further imepede our ability to serve our clients.
Will moving to a fee-only model result in better, unbiased advice?
Will we be forced to a fee only model to protect yourself from liability?
Can our clients afford to pay up front fees /or will they be willing to?
Will the liabilities drive up our errors and omissions coverage?
Will we be able to stay in the business if liabilities become too great?
All questions that should be deliberated and consulted and considered before, enacting another layer of beuracracy.