June 10, 2013
Gentlemen,
As a former FINRA licensed broker with Ameriprise, and an independent broker with National Planning Corporation, and a current owner of a Registered Investment Advisor (ARGI Investment Services, LLC). I am writing oppose the harmonization of the fiduciary standard between RIA's and Broker/Dealer registered representatives.
The brokerage industry does a good job at raising capital for companies. They are the "sell side" of the market and as such are critical to helping the financial markets run smoothly. I believe the general public would be well served if they knew the primary objective of the brokerage industry is to sell the securities of publicly listed companies. An analogy I believe the general public would relate to as a comparison could be an automobile dealership, the public knows when they go into a Ford dealership they are going to be recommended a Ford product over others. It is up to the public to decide which brand and model of automobile will best suit their needs. The confusion comes when they remove all signage and bill themselves as a buyers advocate. Without proper disclosure, the general public doesn't know which manufacturer they represent. This is the problem with the brokerage industry, they want the public to think there is no difference between the "SELL" side and the "BUY" side.
The Registered Investment Advisors have been operating under the fiduciary standard since 1940 with relatively few problems. The public should be more informed about the obligation of this "BUY" side to represent their best interests above their own and to disclose any conflict of interest they may have.
I believe the problem does not reside with the current laws, rather, it resides with a lack of honest education of the general public. If the SEC wants to help the current situation, it should allocate some of its budget to explaining to the general public the difference between those who are paid to raise capital for third parties and those who are paid to evaluate those offers as fiduciaries on behalf of their clientele.
Ron Butt, CFP
Senior Partner
ARGI Financial Group