February 7, 2005
In my professional opinion, the SEC is missing the primary point of argument regarding this issue. The issue is NOT to determine when advice is solely incidental to brokerage operations. Rather, it IS to make sure that all people in the business of providing advice are deemed to be fiduciaries, and are regulated as such.
The public is unable to easily draw a distinction between brokerage operations and advisory operations. Marketing spin, clever sales tactics and legal disclosures blur the line between these two areas. Rather than mandating additional disclosures, the rule needs to be abolished so that the playing field is level.
For the sake of the consumer, I urge you to withdraw the Merrill Lynch Rule. You have an opportunity to strengthen the industry if you will simply rule that all professionals in our business hold themselves to a fiduciary standard. Anything less than this is inappropriate, and harmful for the public.
John K. Ritter, CFP, CFS
NAPFA Registered Financial Advisor
Ritter Daniher Financial Advisory, LLC