September 24, 2009
I am an independent financial advisor.
I object strongly to FINRA's proposal to double the Personal Assessment (PA). They state a need to stabilize revenues and provide protection against future industry downturns.
It would be nice if I could "stabilize revenues and provide protection against market downturns", but the only way that I can provide protection to be able to pay my bills during downturns is to set aside reserves for such times. I have not gone to my clients and said that I am going to charge them more. Most of my income is from sales charges on mutual funds which are regulated by prospectus. I attempt to make it clear to my clients that downturns are part of long term investing. FINRA should read some of the warnings about markets investments that they require us to have clients sign that state "past performance is not a guarantee of future results" and "this and all investments can lose value".
Now FINRA wants to double my assessment as I struggle through a downturn. I am fed up with regulators letting the crooks like Madoff and Stanford steal billions from the innocent and give our profession a bad name. At the same time, regulators add ever increasing administrative and compliance burdens that cost financial advisors who are trying to provide honest advice for at a reasonable cost to the public. All of the compliance requirements add costs to doing business and make it ever more difficult to provide financial advise to anyone but the wealthy. Most advisors today require six figure sums to invest before they will take a client. The people who need advise the most cannot get it.
I am already having to pay more to the SIPC because of the failure of regulators. Tell FINRA that times are hard, effectively manage the resources that they have and prepare in advance for the next downturn.
David L. Ehrig