July 30, 2010
The suitability standard governing broker-dealers and registered representatives is a robust and heavily enforced standard.
Compliance costs-both in terms of finances and time-are high, and those costs are eventually felt by clients. Adding another layer of regulation means another layer of compliance, and even more cost to clients.
Due to my being securities and insurance licensed, I have my Broker-Dealer compliance to deal with, along with each State Securities Division, and FINRA. This is enough
Our office is audited at least annually by our Broker-Dealer, and we have experienced random audits by both our state and FINRA in the last few years. Compliance is a major time commitment already and need to pay staff to keep up.
I like fee-only models, however, it should be an option of the type of services that I provide my clients. Not everyone should be in a fee model. We shouldn't be forced into it. Not all clients will want to pay fees, some only want to work on a transactional basis and are better suited paying sales charges.