August 25, 2010
I have long been a proponent of a fiduciary standard of care ever since my undergraduate days at the CFP Board-certified Personal Finance program at UW-Madison. Since I graduated from the program in 2005, I have worked for fee-based and fee-only RIAs that were obligated to work in the clients' best interests. I obtained my CFP designation in 2007 because of the high standards and code of ethics CFP practitioners adhere to and that is important to me. I serve on the board of the local chapter of the Financial Planning Association (FPA) because I feel strongly about advancing our profession and I feel this study is an important piece to move our profession forward.
There are too many conflicts of interest in place in the financial services world. Many consumers are uneducated about financial products and put their faith and trust into the person advising them. A suitability standard does not serve a client best because the advisor can simply put them in an investment that is "suitable" just to receive a higher commission. There are too many incentives in place in the financial services industry that tempt brokers, insurance agents, and other financial professionals to place unknowledgable clients into products that pay out commissions or loads to the broker/agent without the client knowing.
A fiduciary standard of care will put measures and standards in place to protect the consumer and I urge the SEC to adopt such a standard for all financial professionals who provide investment advice. It will advance the financial services industry toward a true profession aimed to serve a client's true needs rather than an industry aimed to make money. It's common sense this legislation will protect the consumer and there should be no partisan argument in Congress against that. Congress and the SEC needs to ask itself who it is serving: the consumer, investors, and the public or the interest of the big banks, insurance companies, and brokerages. The answer seems clear to me, I hope you will see it too.
(Attached File #1: 4606-2065a.pdf)
(Attached File #2: 4606-2065b.pdf)