Subject: File No. 4-606
From: Troy S Schoonover
Affiliation: Financial Advisor, Edward Jones

July 30, 2010

The fiduciary standard, as defined in the recently passed reform bill, will subject everyone to a vague standard which allows regulators and unscrupulous attorneys to look back with 20/20 hindsight at my actions. The "best interest" of a client, as the standard reads in the bill, is so subjective as to tie us (the client and the advisor) up in knots as to our decision-making.

I cannot know if this implies best interest as it relates to lowest cost vs. overall value, best past performance vs. best predicted future performance, or whether it accounts for the fickle "interests" of my clients as their risk tolerances suddenly change during market corrections.

I have always thought that regulators can only prosecute (and convict) egregious examples of bad faith, but the "best interest" standard will open up many well-intentioned advisors to lawsuits. It will create so many varied interpretations of the standard (one that will no doubt be tailored to the case each plaintiff), that advisors will always be on guard. We will have to fall back on presenting multiple options and letting the client decide without the advisor's input as to the course of action they should take (when that is specifically what they've come to their advisor for: advice--a recommendation).