July 30, 2010
I work for New York Life who has taken the issue of compliance and suitability very seriously over the years I have worked here, especially the past 18 years. Compliance costs-both in terms of finances and time-are high, and those costs are eventually felt by clients. Adding another layer of regulation means another layer of compliance, and even more cost to clients
I am a registered representative and also have my CLU and ChFC designations. Every year we have Firm Element meetings, ethics meetings and every three years I take an exam designed for stock brokers going over investments that my company doesn't even allow
I have had to hire an assistant for 16 hours a week to help me keep up on the compliance issues, forms and record keeping just to meet my companies requirements. And while that is a cost to me, this fiduciary requirement has a cost far greater than what any one is willing to admit. LAWSUITS. You are considering giving ammunition to attorneys to sue because something doesn't perform well when hindsight will be 20-20. Not only is that an impossible standard it is not even reasonable.
I spend a great deal of time educating my clients on the investments in the market place, the risks associated with those investments and helping them assess their risk tolerance. I do not have a crystal ball but you are asking me to. Past performance is not an indication of future performance and yet you are asking us as registered representatives to make recommendations that in retrospect will be judged to be correct or incorrect unfairly.
I respectfully request that you reject this direction and insead that you direct your attention to more appropriate oversight.
I feel that I have helped thousands of people to prepare for the future retirement, college education, save for a house, pay down debt, leave a legacy, take care of those left behind. I will have to seriously contemplate whether I want to continue doing this if you adopt this standard. You are considering penalizing the rank and file for the sins of the mortgage companies and the government that turned a blind eye to excesses in the Collateralized Debt Obligations and mortgage industry.
The failure was not with the registered representative of this country, it is with the notion that credit should be cheap and easy and that improper lending to people who do not have the ability to service that debt is in the best interests of the country.
I sincerely hope that you reconsider this move. On behalf of the people I work with they would tell you that they would not 'PAY' an upfront fees and I just don't see how more regulation is going to help my clients make more money. There has never been a right way to do the wrong thing. Let's deal with the real abuses and not put the blame and cost on the wrong people.
Brenda Brink, CLU, CLTC, CHFC
Agent and Registered Representative of NYLife Securities LLC