August 6, 2010
RE: Fiduciary standard on Registered Representatives
The suitability standard governing broker-dealers and registered representatives is a robust and heavily enforced standard.
As a registered representative, it seems as though I spend a significant amount of my time complying with laws and ensuring customer suitability. I think this is a good thing, but I don't think there is need for additional standard for representatives. It seems as though I spend more and more time fulfilling rules and satisfying requirements and have less time to actually interact with and serve my clients.
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.
I have each client account and each transaction monitored by my OSJ as it is.
I've had to spend much time and a lot of money to "comply" with the current rules and laws. As each year goes by, it seems there is more compliance to deal with and less time for client interaction and actually adding value to my clients.
I think moving to fee only will only hurt consumers. Many middle-class Americans would not or could not afford to pay fees for advice that I currently offer for free.
If liabilities become too great, I will not be able to continue to offer the service I love to offer. Subsequently, I would have to lay off employees that help me in my practice.
I don't think this arbitrary "best interest of their clients" language will help any customer or representative and will open myself up as well as my broker/dealer to potentially many frivolous lawsuits.