August 6, 2010
I respectfully disagree that the legal fiduciary duty governing investment advisers provides greater investor protection than the suitability standard governing broker-dealers. The fiduciary standard looks back and enforces breaches retroactively through SEC enforcement or private lawsuits. the suitability standard looks forward and tries to prevent harm to consumers through ongoing and frequent FINRA and broker-dealer audits and compliance processes.
Compliance costs-both in terms of finances and time-are high, and those costs are eventually felt by clients. Adding another of regulation means another layer of compliance, and even more costs to clients.
I have an Insurance License(45 States) Securities License(Series 7) and a Certified Public Accountants License. To maintain these requires a substantial amount of time and money to stay in compliance each year. Plus my staff has to spend time monitoring our records and tranactions to make sure we stay in compliance with our broker-dealer.