August 28, 2010
I'm a registered rep holding a series 6, 7 63. Regualtions create more and more paper work for us to deal with customres. Currently, we file more pages on 'best practices' for customres than the application for the carrier. I don't see how you can propose more as most of the forms are duplicating now.
Adding more forms will only cost the client more in fees. If fees get to high, how many potential clients are going to look to invest. Customres are over taxed by the governments now, and you want to chase them away by increaseing costs? Does that really make sense?
The SEC will be adding a layer of overseers for the overseers increaseing cost in this avenue also doesn't make sense.
Currenty, we have to take annual updates and other CE courses so we are keeping up to date with the industry. I personally get examined 'officially' once every year or two, however, the examination continues with each application submitted as each one is reviewed and if someting is missing, the process is stopped until it is corrected or the sale is cancelled and money returned to the client. Again, how where is there room to increase rules on doing more as the companies are reviewing what we are doing to make sure that on an audit for the company, there are no questions in that everything is compliant.
Consumer protection is important, but lets not get foolish by hiring a checker for the checker since all expenses will fall to the bottom line - the customers.
Compliance requirements impacts our ability to serve your clients at every level starting with the brokers.
Unfortunately, every industry has a few bad apples in the bunch that are bad, the government included. More work needs to be concentrated on them and let the rest of the 95% of the do the job we know.
How many quality brokers are going to give up the industry if this law passes because of the increased fees on us or that being held liable for doing what we are trained to do.
The old addage of 'you get what you pay for' exists. I do the best job for the client ALWAYS. I could even tell you what any of the commissions for any of the products are since the doing the right job, the company will compansate me for a good job. Then the client tells their acquaintances to call me and it all starts over again.
Could you imagine otherwise? It costs more to keep a good name and doing a good job than it does to screw up once. A bad name spreads like wildfire. No one remembers a good job for long.
While NAIFA members believe they are already acting in the "best interest" of their clients, the Act does not define what the rules are for compliance with a legal "best interest" standard - thus subjecting registered representatives to the potential of never ending lawsuits. For example, is "best" the cheapest recommended product? The "best" premium relative to the benefit of the product? The product with the "best" historic underwriting and service standards? Is it the one from the carrier with the "best" rating? The fiduciary standard in essence adds a vague legal liability standard that looks back (sometimes after many years) and is enforced after the fact by the SEC or trial lawyers who have perfect vision in hindsight.
Fortunately, due solely to NAIFA's vigorous efforts, the duty as defined by the Act does include some key limitations that prohibit a regulator from holding a registered representative in violation of the "best interest" standard simply because they receive a commission or recommend to the client to purchase a proprietary product.