August 19, 2010
My comment is quite simple. Good Brokers already provide valuable insight and diverse, NON-Proprietary products to their clients - if they want to help their clients and thus grow their client base. It is no more complex than that - and any additional 'safeguards' put in place will be nothing more than 'window dressing'. No regulation on earth is ever going to stop those unscrupulous brokers or advisors. What would be nice is to continue to make brokers' disciplinary records more transparent. That could actually help drive the tiny percentage of unscrupulous brokers out of business.
Brokers and broker-dealers are already so over regulated beyond comprehension and it is NO question that additional regulations will only drive up investor costs further. Of course additional regs will also limit investor choices as well. On top of huge new FINRA and SEC (Madoff) monthly fees we of course have our other ongoing compliance costs (monthly broker dealer fees, state fees, EO premiums, outside account fees, bonding fees...the list goes on and on...on top of the normal business fees like insurance, workers comp, SS etc).
I see no need for the 'fiduciary standard' to apply to brokers and broker-sold products as I feel it will do nothing more than provide a false sense of security to investors and and the same time it is sure to drive up EO and other costs for brokers (and thus clients).