Subject: File No. 4-606
From: Bob Porter

December 17, 2010

Dear SEC Representative,

When are you going to inact laws that protect or at least attempt to ensure citizens are not duped into believing that financial advisors have their best interest at heart. The whole idea that brokers are on commission is ridiculous, lets see do what is right for my client or I really need the commission to make my house payment. You figure it out.

In fact, in most cases, a registered representative (RR) can't be a fiduciary. As explained by W. Scott Simon in an article on, "This has nothing to do with any governmental regulation but to the private contract that each RR agent enters into with its broker-dealer the firm the RR works for. That contract legally requires a RR to place the interests of its broker-dealer before the interests of the RR's clients." I hope you're duly flabbergasted.
There's a movement afoot to change this, championed in part by the minority of advisors who think this is wrong. These advisors have themselves become fiduciaries, and they think their colleagues should also be held to a higher standard.
One such person is Sheryl Garrett, founder of the Garrett Planning Network of fee-only advisors. The "fee-only" part means that these advisors are paid by the hour, the project, or as a percentage of assets under management. They get paid the same regardless of the advice they provide, so there are much fewer conflicts of interest, hidden costs, or industry-paid trips to the Caribbean as thanks for putting so many clients in their funds.
In a previous article on, Garrett wrote that the fiduciary standard "requires advisors to put their clients' best interests first act with prudence be truthful and forthcoming with all relevant facts avoid conflicts of interest and, when conflicts of interest absolutely cannot be avoided, disclose them and manage money in favor of the client." Sounds reasonable, right? So why is Wall Street fighting it?