Subject: File No. 4-606
From: Kalman J Kovach, MBA, CLTC
Affiliation: Professor of Finance Lindenwood College

August 3, 2010

Compliance costs,both in terms of finances and time, and those costs are eventually felt by clients. Adding another layer of regulation means another layer of compliance, and even more cost to clients.
Your proposed standard does not address the following:

Will moving to a fee-only model result in better, unbiased advice? No
Will I be forced to a fee only model to protect myself from liability? Yes
Can my clients afford to pay up front fees or will they be willing to? No
Will the liabilities drive up my errors and omissions coverage? Yes
Will I stay in the business if liabilities become too great? No
Please do not exercise your authority to impose a misguided fiduciary standard on me.