August 24, 2010
PLease don't impose a misguided fiduciary standard on registered representatives.
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 hold a Series 6 and Series 63 license and have annual continuing education requirements to meet to maintain my licensing standard. The amount of compliance required continues to cut down on my ability to effectively service my clients. The amount of paperwork requested for even simple tasks is a bit overwhelming and taxing to the consumer. I could be forced to a fee only model to protect yourself from liability if this new legislation is passed.
Going to fee-only model will not result in better, unbiased advice and will be a disservice to many of my clients that won't be able to afford the hourly fee. Several of my clients won't be willing to pay an up front fee and will likely loose my advice and services due to financial reasons.
I believe the liabilities will cause my errors and omissions coverage to increase. If the fiduciary liabilities become too great, I could be forced to find another career.