August 26, 2010
As a Registered Rep, I strive to do what is best for my clients. I am an independent agent, therefore, I have the luxury to review and select from a wealth of products to fit my clients needs. In doing so, numerous factors are considered. A product that fits the clients needs and is suitable for his or her situation is tantamount . Upon submitting the business to my broker-dealer, the business is again reviewed for suitability. The business is again reviewed through regular audits and other compliance procedures. All this to protect the clients interest looking forward.
Application of a fiduciary standard will not increase protection for my clients. It will only increase my cost of doing business, the cost for my broker-dealer to do business, and ultimately, the cost to my clients for the products they purchase. A fiduciary standard would look back and enforce breaches retroactively through SEC enforcement. These types of breaches are already subject to retroactive review and actions against the registered rep who is conducting themselves in a manner which is not suitable to the client. The real downside is the potential for private lawsuits. Nobody can predict the future, but from a look back view, nearly every decision can be questioned and shown that there could have been a better alternative. This situation will ultimately eliminate the ability to help any client, excepting those with huge sums for investment or those who wish to deal only through a fee basis. The assistance for small investors, which constitutes essentially all of my clients will become an uneconomic venture and these people will be left to navigate their investment decisions alone.
I urge the SEC to not exercise their authority to impose a misguided fiduciary standard on me, my business, my broker-dealer and my clients.