Jul. 31, 2018
I hope this email finds you well and that you seriously take into consideration my input regarding the above mentioned proposed regulations.
It is my understanding that you will be introducing a new "Regulation Best Interest" standard that would allow broker-dealers to say they act in the “best interests” of their clients, without actually being subject to a full fiduciary duty to require it. I believe that to be the wrong course of action. I believe this will confuse the public even greater. If the individual is not held the standard of a fiduciary, then what are the consequences if they use the same terminology that true fiduciaries are required to live by. Do attorneys or doctors get to say they are acting in our best interest, but not actually be subject to a very high standard of care? Why should our industry be any different. Either you are or you aren't a fiduciary. I have nothing against financial sales people, but please don't allow them to say something that isn't true. What is wrong with the suitability rule? Allow the true to be spoken, either we are truly acting in the best interest or we are providing a product that is suitable. Please don't pass this regulation which will cause more confusion to the public.
Furthermore, I understand a Form CRS disclosure that is supposed to explain the relationship between advisors and brokers is proposed, but it seems to contain confusing language that blurs the distinction between who can and should legally give advice, versus who is compensated for the sale of a product. Again, I have no problem with someone making money from the sale of a product, as long as the public (consumer) understand that is how they are paying. That is only fair.
I also think that allowing hybrid broker-dealers to state that they are “financial advisors” without any requirement to disclose when they STOP wearing their advisor hat and switch into a sales role is a major disservice to the public and consumers. If we really want individuals to understand the complexity of products and services, we much fully disclose where the lines blur! As an IAR of an RIA, I have to fully disclose any conflicts that may occur, why wouldn't anyone have to do that? Wouldn't you want to know how someone is getting paid with your hard earned money and if there is a possible conflict of interest?
With regards to the CE requirements, although I am in favor of a potential new requirement that would require independent RIAs to have national continuing education requirements, I don't believe it should be separate from my CFP CE requirements.
Finally, I understand there is a proposal for potential capital requirements in order to start or maintain an RIA; I think a minimum amount of $1,000 - $2,000 is reasonable, but anything larger then that would seem to be against what the USA stands for. Shouldn't anyone be able to start a company if they are properly educated? Perhaps considering bonding or insurance requirements would be a better way to achieve this goal, but placing large capital requirements will certainly cause a short-fall in the growth of the industry - one of the few that is actually trying to help educate the public on more then just investments.
Thank you for considering my thoughts,
Amy Irvine, CFP®, EA, MPAS®
Irvine Wealth Planning Strategies, LLC