August 26, 2004
This comment is on the proposed rule entitled Certain Broker-Dealers Deemed Not To Be Investment Advisers proposed on November 4, 1999.
This rule establishes a two tier oversight process. It imposes a higher level of oversight on independent advisors and a lower level of oversight on wire house brokers. I cannot see how the public is well served by the two tier oversight.
I dont have all the facts. But, in reading about many of the major problems which have plagued our industry, many of them have come from the larger organizations which push products and provide less oversight and control over some of their broker organization.
Second, allowing this different level of oversight without even approving the rule is not a reasonable way to govern the investment world. Im not aware of other situations where the government regulates business in which the proposed rule goes into effect while it is being discussed. Surely, this shows a favoritism of one segment of the financial services community.
I could go on with my concerns, but the two major complaints in this note are sufficient for today. I can only conclude by saying that if additional regulation is needed for independent investment advisors, it is even more necessary for the large firms.
Myles Crowe, CPA, CFP