Subject: IA-BD-Conduct-Standards
From: David A. Madsen, CFP
Affiliation: Merrill Lynch, Pierce, Fenner & Smith Inc.

June 14, 2017

I see Chairman Jay Clayton is asking for comments on Fiduciary Rule as the SEC reviews possible changes.

Here is my opinion:  As implemented by DOL, the Rule subtracts from consumer choice by trying to force a one-size fits all approach on clients.  Also it appears that the Rule allows the wild-wild west of lawsuits to ensue by allowing all State Court practicing Attorneys to bring a Class Action litigation for any perceived technical violations of the Rule.

We’ve all heard the calls for Tort Reform in the Healthcare industry because of innumerable malpractice lawsuits filed against healthcare providers, driving up the costs of additional CYA tests and Malpractice insurance and raising the cost of healthcare to all consumers.

We now seem to want to bring that broken system to the Securities and Financial Advice industry.  It’s  another political quid-pro-quo thrown to the Trial Lawyers Association for their Democrat Party patronage; just as Democrat Administrations did for the same Special Interest Group when bringing us our current broken Healthcare system.

It seems the SEC with their Regulatory staff is the Agency equipped to implement and monitor a Fiduciary Standard rather than the cobbled together version from DOL (without adequate enforcement staff----so the World of Ambulance Chaser attorneys becomes the enforcement mechanism for DOL by default as written).  A poor system by any definition.

And what about the “little guy”, whom this Rule was supposed to protect.  They are being jettisoned in mass by the human Financial Services industry under the DOL Rule as not profitable enough vs. the liability risk.  So they are being told to fire up your Personal Computer and get your advice from a ROBO-Advisor.  Human Financial Advice is now a luxury that Washington is mandating only for the “Rich”.

Kind of a sad state of affairs, especially at our Firm, where our Founder Charlie Merrill created Merrill Lynch with the vision of “Bringing Wall Street to Main Street”. “ Ole Charlie” would roll over in his grave if he saw where our industry is heading today back to a “White Shoe” only environment for those Affluent  who can afford to pay for Human Financial Advice and customized access to Wall Street investments.  Do you have a Quarter of a  $Million or more of investable assets?  Great, we’ll take you on as a client.  All others in the middle class and below get in the queue on your PC and interact with some ROBO ADVISOR algorithms. That’s as close to advice as you’re going to get.  Education?  Forget that too?  Go read some standardized webpage or buy the latest self-serving personal finance book.  You’re not going to get a whiff at talking to a human being about your situation under DOL Fiduciary Rule.



David A. Madsen, CFP®

Vice President
Wealth Management Advisor
Portfolio Manager
NMLS ID # 510802

Merrill Lynch, Pierce, Fenner & Smith Inc.
60 E. South Temple Ste. 200-61; SLC, UT 84111