Subject: Standards of Conduct for Investment Advisers and Broker-Dealers
From: Suzanne Phillips

July 22, 2017

Securities and Exchange Commission,
When investors turn to financial professionals for advice, they expect and deserve advice that’s in their best interests. But some “advisers” who work for broker-dealers are not always required to meet that standard, and some may even be paid in ways that reward them for putting the interests of the firm ahead of the best interests of the customer. Investors lose out on tens of billions of dollars in investment returns each year when these conflicted advisers recommend inferior investment products that pay them more. I urge the Securities and Exchange Commission to adopt new rules, modeled on the Department of Labor’s rule for retirement investment advice, requiring brokers to act in their customers’ best interests and requiring firms to reduce conflicts that undermine that standard. Investors don’t need more boilerplate disclosures, they need real protections from industry practices that put their financial well-being at risk.
I am a retired lawyer, and if a lawyer advised a client to take an action that would benefit the lawyer--and did not provide full disclosure--that would be malpractice, and grounds for discipline by the Board of Bar Overseers. Why does not a similar rule apply to financial advisors?
Suzanne Phillips