July 31, 2010
Comments to the SEC Regarding Fiduciary Standards:
I strongly urge you not to impose a fiduciary standard on my way of doing business as a financial advisor.
I have been providing insurance and financial advice to my clients for over 15 years and am licensed to sell life insurance and securities products in several states. Most of my clients over the years have not been in a financial position to afford to pay me a fee. They trust my judgment and experience to ascertain their needs and when appropriate help them select the financial products best suited to solve those needs. In some cases I will charge a fee and often it is at the clients request, but those cases are the exception and rare.
I have grave concerns over the impact that a fiduciary standard of care will impose on my way of doing business. The presumption that a fee-based financial advisor is providing better and unbiased advice is seriously flawed. My advice to my client is the same regardless of how, or if, I am paid.
I already work in a highly regulated environment. My business is subject to inspection by a host of regulatory authorities, including the Texas Department of Insurance and FINRA. My broker-dealer provides considerable oversight. And because I sell and service employee benefit plans I must also comply with DOL and HIPAA regulations. A significant part of my and my administrative assistant's workload deals with the constant and considerable attention to compliance issues. A likely result of the imposition of a fiduciary standard instead of a suitability standard will be a change in the way I do business. My cost of doing business will increase, my liability will increase, and I will likely have to pass these costs on to my clients in the way of fees. Some of my clients will be able to afford those fees but Im afraid many will not.