August 25, 2004
My purpose for writing is to ask that you withdraw the rule that was proposed on 11-4-99, Certain Broker-Dealers Deemed Not To Be Investment Advisers. This proposed exemption for certain broker-dealers is harmful to consumers because it creates two different standards of conduct for persons offering financial planning services. Registered Investment Advisers will have a higher fiduciary standard, while brokers will be exempt from being required to disclose conflicts of interest in connection with the offer of financial planning services. In addition, the Rule permits stockbrokers to misrepresent their fundamental sales role as one of a fiduciary adviser receiving a fee for advice.
The Rule creates far more problems than it solves. The public would be better served by requiring broker-dealers offering fee-based programs to comply with current registration requirements of the Advisers Act and thereby restoring a level playing field for disclosure of conflicts and ficuciary conduct by anyone meeting the definition of investment adviser.
Mary Dunk Christensen, CFP