Subject: File No. 4-606
From: Robert D Kinnally, Jr
Affiliation: Investment Advisory Representative, Lincoln Financial Securities

July 30, 2010

I feel that every reasonable effort should be made to protect investors and all consumers of financial services. I take great pride in the due diligence and honesty by which I conduct each and every transaction. In addition to holding a Texas Group 1 insurance license I also hold a Series 6,63,65, 7 securities license. Each has its own continuing education and compliance requirements to help ensure I am acting responsibly and professionally.
The compliance requirements with my firm are very strict - as they should be to protect everybody involved, both consumer and financial practitioner alike. A significant amount of time, money and personnel resources are already used to handle the compliance requirements. Every transaction I do is held to the scrutiny of suitability standards. This business model allows for clients of all economic backgrounds to get the best advice in a timely fashion. It also provides a workable economic model to stay in business.
My concern with the new fiduciary standards being discussed is the vagueness of definitions. As I feel I am already acting in the best interest of my clients in the advice I give, I do not have the luxury of playing "Monday morning quarterback" as the SEC and attorneys will seem to have with every recommendation I make to a client. If I had the ability to play Monday morning quarterback with every decision I make with my own finances I would be able to retire in a very short period of time. But, I must live in reality. Furthermore, what defines "best"? If one was looking at variable life insurance which is a registered "best" the cheapest product or is it a calculation of premium versus benefits received? Is it the most highly rated product or a sub-par product with the highest rated company to back the coverage? Is "best" the product with the best net sub-account return? - as if anybody knows what investment rate of return it will produce and if we speculate with a client that too of course is a violation. Is "best" the product with the best historic underwriting and service standards relative to a persons medical history which will give them the best opportunity to get underwritten at the best rate? In the real world, few scenarios can answer each question by pointing to just one product or company. Therefore, the argument can always be made that the wrong advice was given. How does this help anybody but trial attorneys? Does it really help the client? These are just a few questions regarding one particular registered product. The net result for me will probably mean having to charge fees up front for any services which will have to be done to offset more expensive errors and omission insurance and increased time spent with fiduciary/compliance-related issues. This means that many people that I do help will not be able to afford my services because their business is purely transaction-based. Where they will go for quality service I don't know because if this standard is enforced universally then every advisor will have the same challenges to service those with lower investable assets. Those clients I continue to serve will incur more expenses because I will have more expenses since I am, after all, trying to run a business and do not have the luxury of running up unlimited deficits in my business which would ultimately cause bankruptcy and ultimately force the SEC to step in and say I cannot be a registered representative any longer.
Whatever the SEC ulitmately decides to do, it is my hope that the new standards are specific and defined. Otherwise, the financial services industry will be weakened because it will just turn into one big game of "gotcha". A weakened industry won't help individuals and families plan, save and invest for their future.