August 4, 2010
Ladies and Gentlemen
Thank you for providing the opportunity to comment on such an important issue. I think that it is imperative that you do view this all important issue through the eyes of citizens and not through the eyes of special interest groups which seem to carrying out agendas that are focused on their well being and commercial interests. Never assume that a not for profit organization really cares about the public, they care for their own agenda.
In a nutshell the solution is
1) A person is either a registered representative or an investment advisor representative. They can be one or the other but not both. While a firm can be either a broker dealer of registered investment advisor the appropriate employees can only fall into one category.
2) The only titles that people can use are Registered Representative or Investment Advisor Representative. Terms such as wealth manager, financial planner, financial advisor, etc are verboten.
3) If the consumer chooses to use an account offered by a Registered Representative they will sign off that they are aware that conflicts of interest exist and what they are.
4) They will also be notified of any ongoing sales promotions in which the firm of the registered representative is participating.
5) All advertising will be required to show how the expenses of a fund, ETF, or pooled investment rank in comparison to other substantially similar investments of the same class. This means that no loads will be compared to no loads, A to A, B to B, etc,
6) Each firm will disclose in simple language any direct expenditures to secure the account relationship and any covenants or policies in place that may prove to be an impediment to the clients future ability to continue a relationship with their individual contact at the firm should that contact leave. After all most people think of their broker or advisor being the person and not the actual firm.
7) Each firm will be required to advise all clients of any regulatory charges, fines and settlements within 15 days of occurrence and for the next 45 days a client may end the relationship with the firm without incurring any fees for closing out the account or for the transfer of assets.
8) There will be a disconnect between providing advice on securities and lifestyles.
It seems incredulous that the idea of putting some numbers into a calculator and using simple math skills can be considered advice. The majority of financial planners, be they CFPs or not are simply using calaculators that are readily available and attempting to package that with the sale of a security or service. That should not be allowed nor regulated per say. Firms should provide advoce only on the securities that they are recommending or using.
Face it, the answer to all goals that require money are simply calculations that use time, rates of return and cost. Hardly rocket science that should even be called advice