August 18, 2010
August 18, 2010
Securities and Exchange Commission
RE: File No: 4-606
Dear Ms. Murphy:
I am a financial planner and investment adviser representative servicing more than one hundred clients with considerable assets under management. In my practice, I have been servicing clients under a fiduciary standard of care for nineteen years. I strongly urge you to extend the Advisers Act fiduciary standard of care to all financial professionals who provide personalized investment advice to retail clients.
It is unfair to consumers that the quality of advice they receive from a financial professional is dependent on the professionals registration or title. Its no wonder consumers are confused, and do not know whether their financial professional is looking out for their best interests. I can tell you from my personal experience that adhering to the fiduciary standard of care and putting my clients interests ahead of my own benefits my clients and my business.
I began my career as a registered representative in 1968 then established and became an investment adviser representative in 1991. Client retention has been my primary business objective and Im pleased to say that I now count three generations among a number of my relationships. Retention and continuity is the result of the trust and confidence engendered by putting my clients interests first – the fundamental premise of the fiduciary standard.
My clients understand that I will advise them with utmost good faith I will manage any conflicts of interests and disclose those conflicts to them I am compensated for the advice I give them I recommend investments keeping their interests first and I can charge a fee or commission, fully disclosed and based upon their needs and preferences.
Adhering to the fiduciary standard of care does not limit my ability to provide my clients with appropriate services and investment programs. As a fiduciary, I can choose to operate in a business model that is best for my clients. The key is fully disclosing, and avoiding and fairly managing conflicts of interest. Providing financial advice with fiduciary accountability does not reduce services to middle-income clients. It insures that the services consumers receive will be in their best interests -- not in the best interests of the financial intermediary or his or her company.
I urge you to recommend to Congress that it is necessary and appropriate in the public interest and for the protection of consumers to extend the fiduciary standard to broker-dealers who provide personalized investment advice and to initiate a rulemaking to achieve this long overdue consumer reform.
Valentine F. Lynch, CFP, EA, CEBS