July 30, 2010
Adding another layer of regulation means another layer of compliance, and even more cost to my clients. .
o Specific licenses I hold are Series 7, 6, 63, 65 and 26. I also have Chartered Financial Consultant, Certified Fund Specialist and Life Underwriter Trained Certified Fellow designations. I am required to have 30 hours of CE for my ChFC every two years. I also am required to have 15 hours of CE each year for my licenses in order to comply with each license.
o I am audited once every two years.
o In order to maintain compliance standards my office assistant spends an average of four hours per week completing and submitting Transaction Logs Communication Reports Gift and Entertainment Reports for ERISA and Non-ERISA reviewing updated compliance information. I personally am responsible for Completion of Outside Business Activity reports and Compliance Approval Requests for advertising, letters to clients completed in order to be able to operate my day-to-day business.
o The time it takes to maintain the compliance requirements currently impact my ability to serve your clients. More and more time is demanded on an ongoing basis and less time is available for me to work with my clients.
#61607 The liabilities of a fiduciary duty could mean increased costs and and limit my ability to serve my clients.
o Moving to a fee-only model wil not result in better, unbiased advice. My focus is taking care of my clients first and foremost. The service and product I am discussing with my client must be suitable.
o Will you be forced to a fee only model to protect yourself from liability?
o Some of my clients cannot afford to pay up front fees or they are not willing to. This is not a "one-size-fits-all" profession.
o The liabilities could possibly drive up my errors and omissions coverage.
o The question: Will I be able to afford to stay in the business if liabilities become too great? It will be a lose-lose-lose. I lose because I cannot stay in business. My clients lose because I am not able to stay in business. The company loses because I cannot stay in business.