August 30, 2010
My firm recently finished a thorough compliance audit by our broker/dealer. Their compliance requirements for us are stringent and border on overly strict. Their compliance practices slow down production and communications with our clients. Our clients are sometimes critical of the compliance as it may slow down a response to their service request.
Suitability standards currently governing broker-dealers and registered representatives are already stringent and heavily enforced. Current regulations already provide strong and appropriate consumer safeguards.
Requiring compliance with 'fiduciary standards' will drive many advisers out of the market and eliminate a valuable advisory resource to consumers, especially in middle- and lower-income markets.
Additional risk of lawsuits involving registered representatives will increase costs to consumers.
Driving every registered representative to fee-only compensation will not necessarily result in better, unbiased advice for the consumer.
I am interested in providing only the very best advice and product to my clients. Creating a new global compliance standard on top of abundant compliance standards already in place is duplicity, added expense to government and the private sector. Regulations are created to mitigate problems but often create unintended collateral damage that should have been assessed in advance. Thank you.