August 24, 2010
I am a registered representative and an investment advisor representative. I am registered in over a dozen states. I am also licensed for life and health insurance as well as variable annuities. In addition, I am a Certified Financial Planner practitioner. The costs to maintain these licenses and designation are thousands of dollars each year. My staff and I spend countless hours making sure I am licensed, registered and continue to meet the Continued Education requirements for each.
I believe 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 extremely high and growing, and those costs are eventually felt by clients. Adding another layer of regulation means another layer of compliance, and even more cost to clients.
My business processor spends 2-4 hours per day on compliance issues not including time for audits. The amount of paperwork to conduct business and meet compliance requirements has grown to a ridiculus level. Client often say that the amount of paperwork is about as bad as refinancing a home.
Because of the amount of time and attention given to meeting compliance requirements, I have less and less time to serve my clients.
The potential liabilities of a fiduciary duty could mean hefty costs and additional man power which takes away time and attention to clients investments and their needs.
As a professional, I am worried that I may be forced to different way of conducting business to protect myself from liability i.e. fee only.
Many of my clients can't afford to pay up front fees or will not be willing to. And how will all this impact my errors and omissions coverage?
After 25 years of serving hundreds of satisfied clients, will I be able to continue my business if liabilities become too great? Will I be able to pass on my practice to my children?
I am very concerned that additional onerous regulations will eventual force me out of business.