Subject: File No. 4-606
From: Gary Montague
Affiliation: Financial Representative, Northwestern Mutual

August 6, 2010

I am writing to express my concerns regarding proposed application of a fiduciary standard to all transactions executed by registered representatives. I am dually registered as a registered representative (for variable annuities and investment brokerage) and as an investment advisor. In all cases, I am acting in the overall best interests of the client, trying to create an effective solution within their budget and trying to evaluate various trade-offs between products as part of an overall strategy.
The impact of a fiduciary responsibility would require increased time with each client on an ongoing basis, incresaed compliance and recordkeeping costs, and the need to increase the fees or commissions per client to offset these costs.
The net result will be that many clients will simply become unaffordable to service, and will be left to call centers and self-service operations with little or no ongoing guidance. I would have no choice but to raise my minimum investment/insurance requirements and increase my ongoing fees to cover these liabilities. This is a bad outcome for the consumers you are trying to protect.