Subject: File No. 4-606
From: Gary D Rubin
Affiliation: Financal Planning Association of Georgia

August 29, 2010

All advice providers should be held to the fiduciary standard of care- now, more than ever.
Some Registered Investment Advisors (RIAs) have stated that they would rather the broker/dealer exemption remain in place. They say the broker / dealer exemption provides them, as RIA's, a competitive advantage since as RIA's, they are held to a fiduciary standard while their competitors at broker / dealers are not. I say the investing public deserves better. The financial services industry does not enjoy a very favorable reputation and deservedly so. I say its time for the financial services industry to re-earn (if it ever existed to begin with) the publics trust and not just with words but deeds.
The investing public doesnt trust the financial services industry in no small part because it is confused. For example, the public is confused about all the different titles that describe those who provide investment guidance. Generally, members of the public do not understand the difference between CFP, CFA, CHFC, Financial Consultant, Investment Consultant, Registered Representative, Broker, and Registered Investment Advisor, etc.
As this is the case, I argue, it is not a competitive advantage for RIAs versus "advisors, et all" to be held to fiduciary standards while other advice providers are not. Even if there were no confusion about what standard of care is conveyed based on the advisors title, it is simply a disservice to the investing public and morally wrong not to have everyone who is engaged in advising, held accountable to the fiduciary standard of care, whether that advice is incidental or not to the investments or investment-like products being purchased or offered for sale.
Since the public does not understand the difference between advisors based on titles or even credentials for that matter, to allow some purveyors of investment advice to do so without being held to fiduciary standards "paints" all advice providers with the same revolting "brushstroke". Not having all advisors held to the fiduciary standard is bad for the public and is, in fact, actually bad for all advisors businesses. It doesnt help RIAs because the public simply does not, nor should they be expected to, distinguish between advisor types based upon their government registration type or credential.
Investors are not treated equally by those who are fiduciaries and those who are not. That is why the fiduciary standard exists in the first place. Without the broadest application of the fiduciary standard Americans will continue to suffer the furtherance of an already deep financial services trust crisis toward any and all who provide investment guidance and advice.
Broker/dealers and insurance companies claim their businesses will be hurt if their salespeople are held to a fiduciary standard. Will it mean they will have to change some of their policies and procedures? Will there be an expense involved in complying with the fiduciary standard? You bet, and appropriately so Will they be severely damaged or go out of business due to being held to a fiduciary standard? Of course not Any organization that would be that badly damaged by having to comply with the fiduciary standard is probably not one which should be dealing directly with the public anyway. How hard can it be for a company to simply state they want, and are going to do, right by the public to finally put the publics interests first.
Financial advisors are not in the business of selling blue jeans or hamburgers. To the contrary, advisors are engaged with enormously important work. Advisors help people with their lifes savings. This should mean something to us. The public entrusts their entire financial future to advisors of varying types regardless of the acronym or designation that follows their name. The public must be able to trust advisors to act in their best interests first and foremost. Now, more than ever, the public deserves to have the assurance that the person with whom they are engaging for investment related guidance is held to a fiduciary standard. The federal government is the only entity capable of making this a reality. The federal government must step in and force these recalcitrant firms to finally do the right thing. How hard can it be?