July 30, 2010
I am a securities registered representative with over 19 years in the insurance and investment business. I have never had 1 complaint from clients, and am a member of the Million Dollar Roundtable MDRT. MDRT members likemyself are the top 1% of the Insurance Financial Services Members in the world. I hold 2 securities licenses 6 and 63 licenses and plan to pass the 65 securities license soon for charging a fee to select clients who prefer that model.
I am expressing my opposition to the newly proposed File 4-606 Proposed Rulings for Registered Reps and Broker Dealers. There are already enough very thorough laws to keep us appropriately controlled. More is not better. More rules will further suffucate the industry.
How frequently am I examined? I am taking a FINRA 3 1/2 hr computer exam next week to keep up to date w/ securities regulations. Every quarter my broker dealer has manditory meetings to personally attend to stay up to date w/ FINRA SEC rules. Every year I personally go to Winston Salem 5 hour roundtrip and to to other CE classes to keep my 12 hours of Life accident and health education up to date. I am also studying on line CLU and CFP classes from the American College to stay up to date. I am all the time sharpening my vocational axe to better and legally serve my clients. We practice the golden rule with all of them, every time.
The present securties laws put in force since the great depression are more than enough to tighly regulate our industry.
I'd like to give specific examples of how much time our office spends on compliance. We are a 2 person sattelite office which is a part of Wealth Plan Financial Partners- approximately 18 sattelite offices in NC, a part of Lincoln Financial Securities. We have a full time compliance officer - Kate Winters in our Charlotte, NC office. she is as good as it gets with compliance. She goes perfectly by the book and keeps all our t's crossed. She recently had a "mock" audit to make sure our securities files and books are in order. It is an annual event and takes us at least 15 - 20 hrs of preparation each year.
How much paperwork is involved in one securities transaction? A tremendous amount is a part of even the simpliest mutual fund transaction. The tail is wagging the dog the paperwork has become so much. Especially in the last few years the paperwork has become incredible. Now you are considering more regulations? Please do not. We are high trained and ethical and professional advisors. The judicial system in America is based on "we are innocent until proven guilty". That should be the same measuring stick. Allow the entance requirements to stay rigorous. Be professionally kind with law abiding registered reps like myself. But if anyone breaks the law, then punish the offender, not the ones doing a goood job. The rules in our industry are bordering on punitive for everyone, even the innocent. The pengelum has swung too far in the punitive direction.
Another legitimate question has become: How do the compliance requirements impact my ability to serve your clients? It is becoming like a jungle because there are so many laws. Like thick vines wrapped around us, hampering our ability to breathe. I need a machete to cut through all of it just to find my clients and think about serving them, who already trust me. Please detangle the SEC and FINRA rules. It is strangling the honest and hardworking registered reps
It has almost become cost prohibitive to serve small investors, under 50,000 in a mutualfund or stock. The very ones who need our help and guidance the most, and who have the least means to pay someone a fee to guide them. Please help us by not adding more complicated rules. Just rightly enforce the existing and more than adequate laws. Don't add on more layers of LAW.
Ther legitimate questions that this proposed law brings up:
Will moving to a fee-only model result in better, unbiased advice? Not necessarily. I want a 65 license merely to assist those who want it. Maybe 30% of my clients would like fee bassed advise and would pay. What about the other 70%...do I leave them in the cold? Probably many middle class and below middle class investors cannot afford it. they are the majority of investors, and requiring fee based only investors with penalize most american investors.
o Can your clients afford to pay up front fees or will they be willing to? Many will not want this. They are struggling already. just coming through the worst financial time in their lives. Allow us to give them a choice. This is america..home of the free and the brave. Let's allow the citizens to choose from fee based and commission based advisors....not force everyone to pay a fee.
o Will the liabilities drive up your errors and omissions coverage? I am already paying a large amount to this and I have never had even one securities complaint.
In summary-we do not need this new proposed securities proposal. Merely enforce the more than adeqiate laws presently on the books. I believe due to the "great recession" many think the only way to come out of it is to micro manage the industry. This white knuckle approach will strangle the life out of this industry and my vocation. There are many of us who are doing a honest and admireable job. Don't penalize us for the very few who break the rules. Just enforce the rules appropriately on the law offenders.
Robert G. Land, LUTCF, CLTC
President, Landmark Financial Services, LLC