August 26, 2010
I am a financial planner and a Registered Investment Adviser in California providing middle-class people the opportunity to seek financial advice on a fee-only, hourly basis. In my firm, we service our clients under a fiduciary standard of care. 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 benefits my clients and my business. Most of our clients come to us from having bad experiences with their former financial advisers that did not operate under a fiduciary duty to clients. Instead, these advisers sell financial products that make the most profit for themselves rather than provide what's in the client's best interest. My clients recognize and understand that the advice I give them is in their best interests.
Adhering to the fiduciary standard of care does not limit my ability to provide my clients with appropriate services. Providing financial advice with fiduciary accountability does not reduce services to middle-class people. 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.