Subject: File No. 4-606
From: Richard D Shaffer
Affiliation: Chartered Financial Analyst (CFA)

April 22, 2013

-I think that duties of investment advisors and brokers have been legally differentiated to the effect that the group with the less clear standard of care continues to confuse their clients by implying that the most important thing for them is to serve the client's interests in all matters. That is not the standard for broker/dealers, but they imply it is. And, this "doublespeak" is increasing as more brokers embrace fee-based models.

As a non-discretionary investment advisor (an "investment consultant"), with primarily an institutional client base, we have adopted the attitude that we should act as if we are a fiduciary in all matters relating to our service to clients. It would be easy to rationalize that these institutional clients are able to filter all the information and make informed decisions. In reality, even institutional clients need fairness and a high standard of care from their advisors.

Accordingly, while I think that adopting a single, definable and enforceable standard of care is the most appropriate approach, I am very concerned that the SEC does not dilute in any way the responsibilities of investment advisors. This is an area where "lowest common denominator" will be a very dangerous standard. I think that the SEC should require that brokers and broker/dealers "elevate their game" to the same level that they elevate their talk. And, that everyone who holds themselves out as providing investment advice and counsel to clients needs to be expected to deliver such service to the highest standards currently available in the market. A fiduciary level standard.

I'm constantly surprised that investment professionals are uniform in verbally expressing how important it is to them that they operate "in the best interests of our clients," but many practitioners simply can't accept consolidating that idea into a single set of responsibilities. The clients of this industry are virtually unanimous in their preferences.