July 29, 2004
To whom it may concern:
I have recently read articles that have discussed a proposed rule that would allow brokers to give financial advice and perform financial planning on a fee-based commission structure but, they would not be held up to the same standards as an actual financial planner. This really concerns me. I am a young individual investor who would like to keep a clear cut line between a broker or broker-dealer and an actual financial planner. These two serve very different functions in the financial world and there are obvious differences in their daily business. I am also a recent finance graduate who has looked at the financial planning field because it does have a better reputation for putting the customer's interest first. The financial world has already suffered multiple "black-eyes" from scandals that have involved brokers that did questionable business transactions. By allowing brokers to have the title of financial planner or financial advisor without holding them to the same standards could cause investors to enter into transactions that benefit the broker(sales people) and not the investor. This could ultimately cause damage to the financial planners because investors are left to believe that all financial planners act in the same manner. If brokers are going to be involved in giving financial advice, "incidental" or otherwise, they need to be required to follow all financial planning standards. If they are not made fully accountable, it is in the interest of the everyday investor, the financial planners, and the brokers that these two very different services be kept apart.
Sincerely,
Roger Hudgins, Jr.