August 31, 2010
To whom it may concern,
As a Principal in a wealth management firm and a 20 year industry veteran, it is clear to me that regulatory requirements of advisors and brokers alike have increased significantly through the years. It is becoming increasingly difficult and costly to keep up with all the changes and ensure compliance while also providing the high level of service our clients expect and deserve.
Having said that, reform is necessary to put everyone on the same playing field. Opponents of the fiduciary review you are conducting would have you believe that any changes would prevent them from earning a living and jeopardize their business model.
If this is the case, one must ask what kind of business they are conducting that they could not be held to a higher standard and disclose conflicts of interest to their clients?
While advisors and brokers are both heavily regulated, the regulations applied to each vary drastically and unfortunately do not do enough to protect the public from those who are in it just to line their pockets.
When hiring an advisor, investors need to know that his/her interests will always be put first. Period. Regardless of the advisors form of compensation, it is critical that (1) the advisor recommends the best course of action suitable for that particular client, (2) the advisor discloses any and all conflicts of interest (including additional compensation for the investments selected) and (3) the advisor is held to the highest standards in the industry and commensurate with the trust being placed with him/her.
It is irresponsible, not to mention irrational to have different standards apply to different types of ADVISORS. The general public should not have to worry what standard applies to an advisory relationship.
Our industry has done enough to lose the publics trust. It is time we begin to earn it back by holding ourselves to the same standards – anyone calling themself an ADVISOR and investing money on someone elses behalf IS a fiduciary and has a responsibility to ensure the investments selected are suitable