August 23, 2010
Concerning the proposal to add a Fiduciary Standard to Boker/Dealers.
My name is Dave Stangohr and I am a Fianancial Advisor in Missouri and Kansas. I disagree with the need to add Fiduciary Standards to current Broker/Dealer Registered Representatives. I currently hold both a Series 7 and Series 65 licenses and act in different roles, as a Financial Advisor and as a Registered Representative, at different times.
Asking a Registered Representative to hold to a Fiduciary Standard when dealing with a customer in a Broker/Dealer relationship should not be required because we already have very stringent Suitability requirements. These are in place for the point in time the investment recommendation is made and take into account all current information about the customer and the market. These transactions are also reviewed by our Principal to ensure suitability. If the conditions with either the customer or the market change and have an effect on the current investment portfolio, we have to weigh whether additional changes are warranted in relation to additional costs that may be incurred.
This situation is opposed to acting as a Financial Advisor and collecting an on-going management fee. In this case, when conditions change, we can make any changes neccessary to the portfolio.
Putting a Fiduciary "burden" on Registered Representatives would force many into only being able to offer fee based services to ALL of their clients. The ones that don't need that or can't afford it are the lower net worth customers and they would be the most impacted.
Also, this would increase the already heavily regulated work required by our compliance department. All Representatives and Advisors are already going through on-going compliance training on a quarterly basis to stay on top of issues and to make sure we are following suitability rules.
Additional regulation, however well intentioned, does not add additional safeguards for the customers and in this case may actually take away from the benefits of having a professional help with managing their investment resources.
Please take these things in consideration before adding new regulations because you think some in our industry have not helped their customers make wise decisions.