August 6, 2010
To The SEC - Regarding the study examining the effectiveness of regulations governing broker-dealers and investment advisors.
I have been in the financial services business for over 25 years and have worked with the suitability standard over those years. I do not believe it would be in the best interest of the clients to move away form the suitability standard to the fiduciary standard.
Reasons are: 1 Compliance costs- both in terms of finances and time are already very high. If we add another layer of regulation, this will be more cost to the clients. I am a Certified Financial Planner and chartered financial consultant and always do what is in the best interest of my clients.
I have several licenses including series 7, life and health and annuity licenses. Also, the CFP certification. The amount of CE required and compliance checks is sufficient. Each year I have my office reviewed by a compliance officer to be sure I am doing what is in the best interest of my clients. I have a staff of 4 full time employees and on average, they spend about 2 hours per week doing compliance issues. I also have significant continuing education requirements. This includes Ethics, insurance, securities, etc.
If we move to a fiduciary standard, I know that I will need to start charging fees for my services. Many of my clients (middle income) will NOT be able to pay this fee and will therefore not get good financial planning advise.
The change to fiduciary standard would definitely be a bad change for the middle to low income person. It is already difficult to serve this market and make a living. With the proposed fiduciary changes, this would definitely be a negative for the average american.
In conclusion, I truly love my career and find it a calling to help people plan for Death, Disability, Unemployement and retirement. Working with the suitability standard I have been able to help hundreds of families in the past 25 years. I am afraid if we move to the fiduciary standard, I will not be able to continue serving these people as I have in the past. And that is sad for them. I have paid many disability claims, long term care insurance claims and life insurance claims to people who need the money. I want to continue to provide these services to all my clients.
I would be happy to discuss any of this with anyone from the SEC if they desire further discussion.