August 25, 2010
Wednesday, August 25, 2010
While the SEC has the discretion to impose a legal fiduciary standard on broker-dealers and their registered representatives, unless the public comments convince them otherwise. The premise behind proposed rule 151a is based on the perception that the legal fiduciary duty governing investment advisers provides greater investor protection than the suitability standard governing broker-dealers.
I disagree that the fiduciary standard has protected consumers better. Basically, the fiduciary standard looks back and enforces breaches retroactively through SEC enforcement or private lawsuits. The suitability standard looks forward and tries to prevent harm to consumers through ongoing and frequent FINRA and broker-dealer audits and compliance processes.
Basically Im regulated enough ,this rule would result in a new liability-ridden fiduciary duty for registered representatives. If not done right the resulting regulation WILL have a very profound impact on how my clients are served or even whether I will continue to do so.
Therefore I would urge that proposed rule 151a be allowed to die the death that should be intended for it.
A. Cubellis, CLU, ChFC, MSFS, LUTCF
Washington State Broker