January 16, 2005
I have reviewed your comments from January 7 regarding a temporary rule to allow fee-based brokerage programs to offer financial planning and other advisory services until a final ruling can be made April 15, 2005. My concerns are as follows:
How can such a line be drawn between incidental brokerage financial planning services and those of true financial planners who have dedicated their business to planning for their clients? I see no way, even with disclosure, that you can allow brokerage incidental practices to continue. Only suitability questions by brokerage services should be allowed but without disguising theirselves as financial planners.
How will you ever be able to make your proposal of making brokerage financial planning services incidental to the brokerage service workable or enforceable.
There is a distinct line as made clear in the Investment Advisors Act of 1940 and those of us who have followed those rules should not be betrayed by the SEC allowing those not dedicated to Financial Planning to be allowed to portray theirselves as any type of financial planner.
It should be considered to identify the services provided by brokerage financial planners by other terms distinct and separate from the financial planning industry and the Investment Advisors Act of 1940 and not be allowed to engage in any Financial Planning services unless fully licensed and qualified to provide such services. There is no reason the brokerage firms should piggy back on the same terms which describe what true financial planners have worked so hard to build their reputation around.
It should be plausable to find new terms to describe what the brokerage industry wants to do and then fully disclose to the customer how it differs from true financial planning. The disclosures will not make sense if a broker continues to refer to his/herself as a financial consultant or financial advisor. Their reference must be distinct and clearly separate from the financial planning practice and avoid any connection to giving advice for a fee.
I offer ideas of Financial Broker or Brokerage Consultant working off of the reputation they have built for theirselves in their practices. They are not financial consultants or advisors as are financial planners.
Do you truly believe your proposal will be helping the public understand the difference between brokers and financial planners. I think not, without a complete overhaul of the broker approach which is presenting itself as planners to get their money but not following up through license and qualifications to meet the services a financial planner provides its client.
The SEC has an obligation to stand strong against the giants to protect the integrity of the financial planning industry and its reputation. It should not be influenced by the assets accumulated by the brokers through their disguise as being financial planners to attract clients.