Subject: File No.
From: Dan Thomas

December 8, 2017

I agree that putting in place some level of increased fiduciary level standards on people in the financial services area is important and needed. I also understand that this can get in the way of making important financial products available to a large number of people as the level of compensation may be inadequate. A related problem is that the products available to many people with the present system are terrible with costs and fees that are improper. And a lot of people are taken advantage of with the current system.

However, the other problem is that some of the proposed rules that were going be put in place were going to cause major increases in fees and costs for the same services. I am a mostly retired worker with significant brokerage accounts developed over the years partially with my own input but also with the input and careful guidance of my stock brokers at a couple regional full service investment firms. With each transaction I pay a normal retail sales charge of 2 to 2.5% of the transaction amount. As near as I can tell, there has been very little change in the basis of computing these fees in the entire well over 40 years I've worked with the one firm. Each of the brokers listens carefully to my ideas and I listen carefully to theirs, which are more numerous. About 1 out of every 5 to 8 ideas is acted on. I have full confidence I am receiving fiduciary level service, as often I get excellent advise on why a proposed idea has flaws, and by pointing out the problems means the broker doesn't get paid. However, with the proposed regulations that were to go into effect earlier this year, the model of service I have worked with for 45 years was going to be unavailable. As I understand it, my paying a standard retail commission of about $225 on a typical $10,000 order to buy 200 shares of a common stock, didn't meet the proposed standards. The well meaning, but rather narrow scoped regulatory folks were seeing this as a problem, noting E-Trade, Scott Trade, and others willing to do stock trades for $5 to $8. True, but these folks are entering orders and not providing investment help and specific advice and may not have much of an idea about who is placing the order and their specific situation. The brokers I work with were going to have to go to a flat fee of 1%, paid quarterly on the account balance. This would have cost me well over $10,000 annually. The one account generates typically $25,000 to $30,000 in dividend and interest each year and losing $10,000 would be really hard. I typically do 6 to 12 transactions each year paying less than $2000 in commissions. The type of annual fee based account is readily available to me and all the firms other clients, but does not serve my needs as well.

I think that any coming regulations need to have reasonable flexibility built into them so that abuses (which exist) can be lowered substantially but also so that other taxpayers aren't needing to pay more for the same financial services they have been using.

The idea of having to pay an annual fee of 1%, so that the brokerage firm would appear to meet the fiduciary standard as set by firms offering only entirely different services is one example where work needs to be done and more fairness to all of the public better put in place.

Thank you for the opportunity to share my concerns.