Subject: File Number S7-07-18: Stop financial advisers from sapping Americans' retirement savings
From: Jim Schulte

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.


Mr. Jim Schulte