August 13, 2010
As a 15-year registered representative, I am opposed to the S.E.C. proposal to hold registered representatives to a new legal fiduciary duty. If passed, this legislatation could easily subject representatives of all financial service companies to never-ending lawsuits. The investment products we offer to the general public, most noteably the open-end investments, are given full disclosure that they are not guaranteed and involve investment risk. The result of this action would be extremely adverse and give clients an open-door policy to take legal action whenever if fits their purpose.
I offer you these key points to take into consideration:
#9650 Suitability standards currently are already stringent and heavily enforced. Regulations already provide strong and appropriate consumer safeguards.
#9650 Requiring compliance with 'fiduciary standards' will drive many advisers out of the market and eliminate a valuable advisory resource to consumers, especially in middle-and lower-income markets (who are not knowledgeable and need help the most).
#9650 Additional risk of lawsuits involving registered representatives will increase costs to consumers.
#9650 Driving every registered representative to fee-only compensation will not necessarily result in better, unbiased advice for the consumer.
I have built up a significant client base over time, and almost every person I've dealt with has needed professional advise and welcome my ideas, knowledge and options. Like most registered reps, I offer a variety of different options for each client with the goal of providing them a personalized investment strategy based on their goals and objectives. The investment world changes daily and our recommendations have never come with guarantees, but gathering the right facts and presenting options ensures we're doing the best for our clients in unpredictable world of investing.
I encourage you to not pass this legislation. Thanks for your consideration.