August 24, 2010
The suitability standard governing broker-dealers and registered representatives is a robust and heavily enforced standard.
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.
I am Series 6, 63 and Investment Adviser Rep.
We spend ridiculous amounts spend on compliance. The liabilities of a fiduciary duty could mean my costs go up and my ability to serve your clients is reduced.
I may be forced to a fee only model to protect yourself from liability, and most of my clients cannot afford to pay up front fees.
I believe the liabilities will drive up my errors and omissions coverage. Further, if the liabilities become too great, I might not remain in this profession and we've lost enough agents with the recent economic downturn. You don't need the rest of the good ones leaving too.