August 24, 2010
The inclusion of (Series 6 or 7) in the definition of "Fiduciary Standard" is inappropriate.
The number 1 claim against reps in arbitration has been "suitability". This is the current standard we are held to. If the "Fiduciary Standard" is adopted, we will be held to that standard, which is a much higher standard than "suitability". In my opinion, attorneys will be able to make a case and win against any rep and win about every situation with this new standard. No matter your intent or how good of a job you have done for a customer, if you are taken to court or arbitration under the "Fiduciary Standard," I believe I have a high chance of losing.
I like the current system whereby a product can be sold to a customer by a BD rep but if the customer prefers a "fiduciary relationship," they can choose to have it via an RIA relationship. Leave the choice to the customer/client.
I chose not to be an RIA. Please leave us choices also.
Please consider not adopting the "Fiduciary Standards".