July 30, 2010
Thank you for researching the need for additional regulation, involving Broker/Dealers and Investment Advisers. I am a currently licensed CFP, a NAIFA Memebr, and an Insurance Producer for a large captive Multi-Line Insurance Company. I sell my companies proprietary investment products only, but I use my knowledge and skill to help my clients grow and protect their financial futures.
Currently, there is more than adequate regulatory protection for consumers, through our current regulatory system of a Suitability Standard, and NO need for a Fiduciary Standard replacing it.
There are many reasons that a Fiduciary Standard just doesn't apply here:
1) The Suitability Standard requires us to prove the need for our product recommendations up front, and is pro-active versus the re-active approach used in a Fiduciary Standard. Therefore it would benefit the consumers more, to continue to get the protection afforded them through the current Suitability approach.
2)Compliance of any type is time consuming and expensive. You could very well price out of the market, the majority of the very same consumers you are trying to protect. Most B/D"s and Investment firms will NOT want to spend their time on less profitable prospects, leaving the lower income earners without any advice what so ever.
3) Lastly, you are endangering the future of the entire industry, by over-regulation and forcing us to pay a higher costs to do business, through our E O carriers, License fees, etc... It is extremely difficult now to recruit, train and develope new Representatives. Many of us know what has happened in other countries, when our type of business's have been over-regulated, they all have disappeared. I don't beleive that would benefit any consumers, to have NO choice of advisors.