August 24, 2010
I am a registered representative and have been for many years. I have been providing for my clients needs for over 25 years.
The premise that we now need more regulations to protect our clients is in my estimation wrong. The fiduciary standard has not protected our clients better. Unlike the fiduciary standard the suitability standard looks forward and tries to prevent harm to our clients or prospective clients through ongoing and frequent FINRA and broker-dealer audits and compliance processes. We are regulated enough. The regulation that you are considering will have a very profound impact on the way we do business and in many cases cause some current practitioners to leave the business.
It is a misconception driven by a few rogue brokers which caused the recent recession that bring this study to where it is today. The additional fiduciary duty will have no impact on those people. Moving to a fee-only model will not provide better, unbiased advise and many of my blue collar clients could not afford to pay and would not pay additional fees. Every aspect of my business will be more costly which will only be passed on to the the client.
I am proud of what I've been able to do for my clients over the last 25 years and I'm not sure if I would continue my practice if I were forced into a fee based only practice. I know in my heart that my clients would not be more protected in any way by the passing of this regulation.