August 6, 2010
The suitability standard governing broker-dealers and registered representatives is already a heavily enforced standard. I, personally, have a life, health and property and casualty license, as well as a Series 6, Series 7, Series 63 and a Series 66.
My practice is currently subject to two reviews each year and the administration, paperwork and documentation that is currently needed has caused me to hire someone just to keep up with the ever growing compliance requirements. This responsibility certainly detracts from my ability to actually serve the needs of my clientele. I am a one person operation with my compliance and administrative assistant who has had to obtain all the same life and health licensing and securities licenses as I do. The costs associated with this has to be born by someone and that currently is me. If I have to start charging all my clients fees, then I run the risk of pricing myself out of the markets other than the small portion of my practice associated with my wealth management advisory services. The passage of these proposed regulations would have me and others contemplating closing our practices and leaving our clients without viable or cost effective advice....much like what has happened to OB/Gyn's in the medical field.
From my experience, I believe there is already an over-burdonsome responsibility on the advisory portion of my practice and to extend this to all aspects of my practice is government regulation gone crazy.
Basically, the fiduciary standard looks back and enforces breaches retroactively through SEC enforcement or private lawsuits. The suitability standard looks forward and tries to prevent harm to consumers through ongoing and frequent FINRA and broker-dealer audits and compliance processes.
I in the strongest way urge you to drop the imposition of additional regulations.
Alex Shibicky, CLU, ChFC