August 1, 2010
As a Registered Representative and agent for State Farm Insurance, I think it likely that those creating this bill are unfamiliar with the standards that we currently have to adhere to and the heavy enforcement of these standards. Notice I said standardS
Compliance is a never-ending process for us. It takes a great deal of time and costs to meet the requirements put upon us at present. I am not only a registered representative, but a Chartered Life Underwriter holding life and health licenses as well as a property casualty license and am also a Life Underwriter Training Council Fellow. I do not take education or ethics lightly. The continuing education hours required by all, and the time for the annual compliance audit as well as mandatory compliance training annually is becoming more exhaustive both in time and money.
Our annual complicance training takes an entire day. Every other year, I am forced to drive one hundred miles to take a "complinance" test....another day. Monthly, I am required to send in compliance reports and annually, I have an in-house audit where every file is searched for discrepancies or any indications that I did something wrong. If I did, of course, there are reprimands and fines that accompany grave errors which is as it should be.
As a Registererd Representative, my actions are far more limited than an Investment Adviser. I do not actively engage in providing advice to clients. Should the SEC choose to treat us the same, it would be a gross misunderstanding of the difference provided in this area of service and grossly unfair. If the Dodd-Frank Act's effect is to require all broker-dealers to be held to a legal and vaguely defined standard "to act in the best interest of the customer without regard to the financial or other interest of the broker, etc.", then many Registered Representatives will probably be driven from the busness. The vagueness of this definition will open us to the potential for endless lawsuits. I believe that I AM PRESENTLY ACTING IN THE BEST INTEREST of my clients. The Act does NOT define what the rules are for compliance with a legal "best interst" standard. We know from the previous experience how something as vague as the word "is" is used in traials, that lawsuits be abundant and will certainly exploit this situation.
Please, reconsider. Do not impose this misguided fiduciary standard on Registered Representatives.