Subject: IA-BD-Conduct-Standards
From: Geoffrey E. Wilwerding, CRPC
Affiliation: UBS Financial Services Inc.

June 2, 2017

On DOL Rule –

Our advisory team has been at this 23+  years and we have clean U4 forms.  95% of advisors do.  There are the 2 or 3 % that make a bad reputation for the peloton.  Not all riders are doping per se.  But if you pass a standard like what is proposed it completely hammers the little investor.  Trust me, you will end up being hated more by small retail investors when all they are trying to do is invest their funds and grow their assets.  There are soooooooo many rules and regulations in place as it is right now that any idiot broker who tries to churn a small account gets stopped in his or her tracks almost immediately at the firm level, so why blanket a rule that hits they investor so hard.  They are already protected.   I don't have a problem with the fiduciary piece of it.  The pricing piece will not make sense. 

You also have to understand what motivates the individual.  Yes, a big fat commission can be a motivator for some brokers (we as a team do little to no commission business anymore, so we act as fiduciaries and are held to that standard on the portfolio program we adhere to)…..But the notion that brokers recommend investment products or securities that are not suitable and too expensive is really baseless.  The industry has forced down pay as it is from regulations as well as competition, so now, there just is such a small portion of trading for commissions  occurring , it seems ridiculous to implement a standard that does in fact hurt investors more than help them from a cost point.  Advisors and brokers are motivated different today.  I think that is a big piece of what regulators are missing.  You are looking to create a mind numbing regulation when the system has been in correct-o mode ever since 2008.

If you pass the deal you will force all accounts onto a fee based system and sure as heck, you will see that run rate gradually increase for clients.  The current system is not perfect, but better than what is being proposed.  Advisors and the industry many times help protect investors from themselves.  Just look at the DALBAR studies which actually do show how poorly investors do who trade on-line (basically free)   vs.  just the market average.  It’s a fraction of the return because they are moving in and out at the exact wrong times.  As advisors, we protect them from big stupid mistakes like that.  That's worth a lot I think.

Geoff Wilwerding    

Geoffrey E. Wilwerding, CRPC ®
Senior Vice President - Wealth Management
Senior Portfolio Manager

UBS Financial Services Inc.
925 4th Ave, Ste 2000
Seattle, WA 98104