August 24, 2010
The suitability standard governing broker-dealers and registered representatives is a heavily enforced standard.
The fiduciary standard governing investment advisers is applied and enforced by many overseerers currently.
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 life and health and securities license. I have internal company compliance to meet with EVERY company I choose to do business with and the compliance requirements and standards currently in force. I must apply for license in every state that I do business with and meet the continuing education requirements every other year.
I must attend a FACE TO FACE compliance meeting and an annual compliance meeting. I have a desk audit every year.
I have a filing cabinet dedicated to this paperwork. I have two assistants to help me The liabilities of additional fiduciary duties could mean additional costs and disturb my ability to serve my clients.
Clients CAN NOT afford to pay up front fees NOR will they be willing to.
The liabilities will drive up errors and omissions coverage.
It may put me out of business if liabilities become too great.