Subject: File No. 4-606
From: Mark Spears, CLU, ChFC
Affiliation: State Trustee of NAIFA, Ohio

July 30, 2010

This is a public comment regarding the SEC study examining the effectiveness of regulations governing broker-dealers and investment advisers.

The premise behind the perception, that the legal fiduciary duty governing investment advisers provides greater investor protection than the suitability standard governing broker-dealers is faulty.

I vehemently 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.

I am regulated enough. Imposing new fiduciary standards could result in a new liability-ridden fiduciary duty for registered representatives like me. Such regulation WILL have a very profound impact on how I serve my clients or even whether I will continue to do so.

The suitability standard governing broker-dealers and registered representatives is already a robust and heavily enforced standard.

Compliance costs-both in terms of finances and time-are high, and those costs are eventually felt by clients. Adding another layer of regulation means another layer of compliance, and even more cost to clients.

I hold a Life Health Insurance license in four States as well a a Series 7 registration. As such I am required to maintain over 20 hours per year of Continuing Education for the State and every year I am visited quarterly by a company Compliance person who reviews my files and overall operations and attend Annual Compliance Meetings.

I will have to hire someone into my office whose primary job will be keeping up with compliance, if there are any further layers of regulation added.

Compliance requirements negatively impact my ability to serve my clients, in that it steals so much time and energy that could be spent on providing top notch service to more of my clients.

The liabilities of a fiduciary duty would mean my costs and ability to serve my clients will be severely impacted... to the point that I may be forced to leave the business altogether. I can see nothing but much higher EO liability insurance costs being required to deal with a fiduciary standard.

Moving to a fee-only model will not result in better,
unbiased advice. And being forced to a fee only model, to protect myself from liability, will only drive costs beyond the affordability of the vast majority of my clients. This would mean they would be left with trying to navigate the world of financial services on their own, without the help and advice of a trusted advisor with whom most of them have worked for over thirty years.

The Dodd-Frank Act permits the SEC to require that all broker-dealers be held to the same legal fiduciary requirement investment advisers have when providing advice to clients. Should the SEC choose to use that authority, the fiduciary duty as defined by the Dodd-Frank Act
would require that all broker-dealers be held to a legal and vaguely defined standard "to act in the best interest of the customer without regard to the financial or other interest of the broker, dealer, or investment adviser providing the advice."

I am already acting in the "best interest" of my clients. The Act does not define what the rules are for compliance with a legal "best interest" standard - thus subjecting registered representatives to the potential of never
ending lawsuits. For example, is "best" the cheapest
recommended product? The "best" premium relative to the
benefit of the product? The product with the "best" historic
underwriting and service standards? Is it the one from the carrier with the "best" rating?

The fiduciary standard in essence adds a vague legal liability standard that looks back (sometimes after many
years) and is enforced after the fact by the SEC or trial lawyers who have perfect vision in hindsight.

Such regulation would undoubtedly drive a substantial number of long-serving professionals like me from the business and diminish the availability of client-centered advice from the marketplace.

I do not think that is or was the intent of the recent legislation... however, as with so very much government intervention into business and our private lives, there can be drastic and devastating unintended consequences.

I urge you to not over-regulate an already heavy regulated profession and leave the currently adequate Suitability standards in place.