Jun. 23, 2018
Jun 23, 2018 Securities and Exchange Commission To the and Exchange Commission, After retiring a few years ago, I visited with a local certified representative (ChFC, CRPC) of a large, national firm of financial advisors. He suggested that my wife and I transfer our retirement funds (IRAs, Deferred Compensation) to an account with him. My wife said she was willing to accept moderate risk. I said I preferred low risk. The advisor told us he had a proven package of investments that would meet the needs for both me and my wife and give each of us about $1,000 per month income ( a return of 6%-8%). The investments for both me and my wife lost about 25% of the value within the first year. The representative keeps telling us to concentrate on the monthly income and not worry about the loss of principal value, because it will come back. He has NOT provided us with a satisfactory explanation of why the investments lost so much value shortly after we agreed to his advice, or why we should expect the initial value to return. My wife and I both continue to receive income from the investments of about $1,000 per month each, but have not regained any of the initial losses over the past three years. I understand that investments always have some risk, but I cannot understand why we experienced the large losses almost immediately after accepting the advisor's suggestion (especially since I told him I wanted low risk investments). HE chose the investments and HE represented himself as the expert, professional financial advisor that we could trust. I do not feel comfortable that the advisor was looking out for our best interest to the extent he should. When I first heard about the new regulations that were supposed to go into effect and would obligate financial advisors to a fiduciary responsibility to always work for the best interest of the client, I was surprised. I had always assumed they had that responsibility. I presumed they had to accept that professional responsibility in order to get certified/licensed. After all, they hold themselves out to be the professional expert that is there to help their client who relies on their professional expert advice. Now I realize the regulations to hold financial advisors to a fiduciary level of responsibility are being withheld. I understand that financial advisors do not want to be held to this responsibility. But without regulation requiring fiduciary responsibility, investors (especially the elderly, like me) are at the mercy of unscrupulous advisors. The good ones should not fear regulation that requires heightened professional responsibility. I understand one argument advisors use against more regulation is that it would limit the ability of clients to take advantage of higher returns from riskier investments. But, if a client wants riskier investments in order to possibly gain higher returns, the client can still do that by giving such instructions to the advisor. I hope my story helps explain the need for further regulation requiring a higher level of fiduciary responsibility for financial advisors. Sincerely, Mr. Jim Schulte