August 24, 2010
The suitability standard governing broker-dealers and registered representatives is a robust and heavily enforced standard. It serves my clients well in that we discuss at time of sale what client needs are, and how their investments will help them to achieve those needs.
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 do not feel that this is in my client's best interests at this time. My clients are already complaining about the amounts of disclosure and regulation that are already demanded. Many clients comment to me "Does the government NOT understand that the amount of disclosure and regulation that the government demands is inversely proportional to amount of understanding I actually have as a client?"
I presently hold securities and insurance licenses in Colorado, as well as in California, Utah, Nebraska, South Dakota, North Dakota, Wyoming, Oklahoma, and Texas. I am already examined at least annually by my broker-dealer, and I am under continual suitability reviews by my home office on any transaction I submit.
I have been in practice now for over 23 years. During this time, the amount of time I spend in compliance has already more than tripled. Existing suitability and compliane requirements have already impacted my ability to have in-depth discussions with my clients on their actual investment needs, and how various investment programs can impact their ability to live successful lives, and to thrive in their retirement years. Further compliance requirements will shorten my ability to have meaningful conversations with my clients. If the SEC establishes even greater fiduciary duties on my practice, my costs will increase, and I will be forced to pass greater costs on to clients. This is not the time to increase costs to consumers.
During your study and comment period, I ask that the SEC specifically consider whether this additional regulation is necessary, or in consumers best interests. In summary, I do NOT believe the benefits outweigh the costs of this additional regulation.