Subject: File No. 4-606
From: Charles D Leedy
Affiliation: CFA Charter Holder

March 27, 2013

I strongly believe there can be only one standard for the term "fiduciary."
If stock brokers are allowed to call themselves fiduciaries then it would follow that they:
1-give up all conflicts of interest: no commissions, 12b-1 fees or anything that puts their interest in direct conflict with that of their clients
2-Brokers will now be legally liable for their advice. There will no longer be a "suitability" standard. They will be legally required to act in their clients' best interests, as all fiduciaries are.
3-The brokerage industry could no longer require their clients' redress be limited to arbitration. any disagreements/damages would be able to go directly to civil court.

There, I believe, can be no "fiduciary-lite." Either you're completely obligated to act in your client's best interests or you're not. Any watering down of the fiduciary standards for brokers would effectively mean "no fiduciary standards." This industry has had no problem getting around rules and regulations in the past and their lawyers certainly wouldn't have any trouble in this case.
There are just too many structural and inherent conflicts of interest to apply fiduciary standards to the brokerage industry.