August 26, 2010
ProVise Management Group, LLC
611 Druid Rd E Suite 105
Clearwater, FL 33756
August 25, 2010
Re: File Number 4-606
Dear Ms. Murphy:
Please allow me to introduce myself as someone who has been in the financial services business since 1971. Since the late 80s, ProVise Management Group, LLC, has been a RIA with the SEC and has represented its clients in a fiduciary manner. Even when acting as a Registered Representative of NFP Securities, Inc. (as well as previous broker-dealers), we have attempted to work under the fiduciary model as opposed to one of suitability. We currently represent approximately 550 RIA clients who collectively, as of July 2010, have approximately $700 million of assets under our direct management on a discretionary basis.
I cannot urge you strongly enough to extend the Advisors Act fiduciary standard of care to all financial professionals who provide personalized investment advice to retail clients. Unfortunately, too many salespeople make it appear that they are putting the clients interest ahead of their own, when in fact they are doing exactly the opposite. It is unfair to consumers that the quality of advice they receive from a financial professional is dependent upon the professionals registration or title. Therefore, it should come as no surprise that consumers are so confused. Their expectation is that the professional will put their interests first. However, this is not the case unless the professional adheres to the fiduciary standard of care, which is the case for all of the professionals in our office.
Our clients recognize and understand that the advice given to them is in their best interests because our loyalty is to them first. We advise them with good faith, we manage any conflicts of interest that may harm them and disclose those conflicts to them. We get paid for the advice we provide and the investments we select for them. We are required to choose from the best investments available, keeping their interests first, and we can charge fees or commissions, based on the clients needs and preferences.
Adhering to the fiduciary standard of care does not limit my ability to provide my clients with appropriate services and products. To the contrary, as a fiduciary, I can choose to operate with a business model that is best for my clients. The key is full disclosure and avoiding, if possible, disclosing, and fairly managing conflicts of interest. Providing financial advice with fiduciary accountability does not reduce services to middle America. That is simply a smokescreen by those who wish to continue to hide their primary motivation. It ensures that the services the consumer receives will be in their best interests – not 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 and others who provide personalized investment advice and to initiate a rule making to achieve this long over-due consumer reform. In this day and age to do anything less seems inappropriate. Thank you for your consideration.
V. Raymond Ferrara, CFP®, CSA
President and CEO