August 24, 2010
The current standards of suitability are sufficient to protect the public in their investments. It requires that we, as investment representatives know adequate information about the client to make investment recommendations. A fiduciary standard would require, in my opinion, that we as respresentatives be involved in ALL aspects of our client's financial lives to a much greater degree than most of our clients would like to have us involved. How can we act as responsible fiduciaries unless we know each and every aspect of our client's financial lives. If we are to incur unlimited liability, we should be entitled to unlimited information. In cases of single transaction, single commission product sales, how does the commision earned compensate us for ongoing duty as a fiduciary. Will we be allowed to charge the client annually for our fiduciary services like a trustee? Is the client benefitted by this additional cost or are we to just give away our services?
If the goal here is to drive away responsible investment counselors from the business, this way is a good method.
The balance will attempt to make themselves judgment proof and disregard the client's needs.
I currently have biennial requirements of 24 hrs for law 20 hrs for life insurance and approximately 20 hrs for investments continuing education requirements. Very few, if any, of the hours overlap disciplines. How many more hours of compliance will be needed to fulfill fiduciary responsibility? I think approximately one full week per year is enough compliance.
Please reconsider imposing the fiduciary standard on investment representatives. The current suitability standards and all compliance requirements will keep the good and honest representatives working for their clients. As for the other types of investment representatives, it wil make no difference what standards are imposed.