June 5, 2017
6/5/2017
Thank you for the opportunity to comment on investment advisor standards.
Before the DOL overstepped and suddenly decreed that it has all authority over IRAs,
the industry operated under regulations from multiple regulators, primarily the SEC and
state insurance and investment agencies. I hope the president, the court system or Congress
overturns this travesty.
A financial advisor could get licensed and sell fee-based services and get licensed to sell
insurance and investment products on a commission basis. The fee-only advisors claim
they are superior to asset-fee advisors who are claiming superiority over “conflicted”
commission advisors. Organizations such as the CFA and CFP have supported the consumer
organizations in trying to ban commissions. I believe this attack is rooted in politics rather
than facts and that the SEC should preserve the current system with the following guidelines:
1) Rather than label advisors, all business submitted should be labeled fiduciary (fee-based) or
brokerage. If an advisor wants to become licensed in one or both, that is their choice. If a client
wants some or part of their money managed one way or another, that is a client choice.
Forcing level fee compensation on advisors is also forcing level fee payments on clients and they
are losing consumer choice.
2)The idea that all commission-based business is conflicted and inherently evil needs to be stopped
since it is being pushed by those that benefit from banning it. American was founded on capitalism and
companies should compete for business rather than be regulated to only sell fee-based products.
3)Regulation for IRAs should stay where it has been traditionally and the DOL should not be involved.
The SEC and state insurance regulators should have say in IRA products, not the DOL.
4)The SEC should make a general best interests rule that accommodates investors by allowing fiduciary, brokerage
and insurance products. The rules can be written to protect consumers by clearly labeling whether a products is
fiduciary or brokerage. The SEC can further protect consumers by increased disclosures, clearer labels on fees,
banning of kick-backs and other similar protections.
The current DOL is constricting markets and products and booting out small investors. The SEC can and
will do better.
Robert Shaw