July 30, 2010
To: Securities and Exchange Commission
I am writing to object to the proposed change in fiduciary standard for financial advisors, of which I am one.
The current standard is heavily regulated and enforced by my Broker/Dealer and the industry. My Office which is a branch of the B/D is examined four times per year by the OSJ, each quarter with a thorough audit, and there are also regularly scheduled audits from the Home Office B/D Compliance Dept. Occasionally, there are spot audits by my OSJ office and Broker/Dealer home office. We also are periodically spot audited by the State of CT Banking Commission. Compliance costs in terms of time devoted are high as it is, and to increase oversight activity will only increase compliance costs, which are sure to be passed on to consumer clients.
We are a small Office and my Assistant spends approximately one-two hours per week every week on compliance related matters and tasks. Any increase in further compliance activities and tasks will place an undue strain on my ability to provide high quality service to my clients.
I am currently a non fee based Advisor, and if the change in fiduciary standard is made, it is my understanding that I may be forced to move to a fee based platform to increase my liability protection, which I feel will be met with resentment by my clients many of whom I have serviced for many years on a non fee basis. Especially during the tough economic times that we are still confronted with.
I am licensed in several states and pay several hundred dollars per year in fees to maintain those licenses.
Also, as part of current compliance requirements, I have to take yearly and biannual compliance exames, some on line, and others at a testing center. This represents additional oversight under the current standard.
All financial advisors and broker/dealers who are currently expending signficant time and expense to maintain and deal with compliance requirements should not be further impeded by being required to increase time and expense with a complete new standard, which will only result in a negative result for clients with increased costs being passed on to them, all due to the actions of a few who have created the concern and problems in the financial services industry.
I urge the SEC to review, examine and reflect on the current fiduciary standard and hopefully determine that it is not necessary to "reinvent the wheel" so to speak by completely changing the fiduciary standard and system to shore up and stop problems. The costs and consequences will far outweigh the desired result. Working within the current standard and system, changes that are necessary can be made far more efficiently than by doing a complete unnecessary overhaul to the consequene of the consumer.
Ronald J. Tine, MBA ChFC