Subject: File No. 4-606
From: Kolleen R Edwards
Affiliation: National Association of Insurance and Financial Advisors

July 30, 2010

The SEC has formally announced that it has begun a 30 day public comment period regarding its study examining the effectiveness of regulations governing broker-dealers and investment advisers. Following the study, 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 the effort 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'm against this change. 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. Also, while I believe 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.
Please consider my comments