September 10, 2004
This is a comment on the Exemption proposal for regulation of Broker/Dealers.
I believe that this ruling completely contradicts the spirit and purpose of the 1933, 1934 and 1940 Acts. If planning services are to be provided by the brokerage industry whether or not compensation for such services is received in the form of fees, the brokerage industry should be subject to the same disclosure and practice management rules as the Registered Investment Advisors.
This Exemption, if left to stand, will further limit transparency for the majority of the investment public as to what a particular individual in the securities business is really doing. For example, selling Variable Annuities, hawking Initial Public Offerings sponsored by their Brokerage firm, pushing stock they when they have been given selling quotas are all activities that apparently need a place in the financial spectrum, but these need to be clearly separated from the role of product-independent financial advice in the mind of the buying public.
If someone is seeking financial advice that is not tied to a particular product solution, they need to have, at the very least, clear labeling of the product/service that is being offered. If those who are clearly charged by their respective firms with selling products are allowed to masquerade as finacial advisors, yet are not required to have any specific level of training, experience and/or testing to qualify as such, then you risk meking it appear that, once again, the SEC is more concerned with helping big business than it is the individual investor. In time, this bias will further erode investor confidence.
A classic example of this is what is now going on in the mutual fund business. A number of firms, after clearly breaking the law, have been allowed to plead that while they didnt admit to doing anything wrong, they nonetheless were willing to pay a large fine, and not do whatever it was they were doing again. And nobody went to jail The SEC allowed all to go back to normal, but unfortunately now normal stinks, and the consumer is left confused as to who or what they can trust.
Please come to the support of the individual, and ensure that ALL persons who hold themselves out to the investing public as financial advisors be they CPAs, attorneys, bankers, Brokers, or Investment Advisors be held to a common set of standards and regulations that are made visible to, and are understandable by the general public.
Remember, if it waddles like a duck, quacks like a duck, has the appearance of a duck, and calls itself a duck, it IS a duck, and should be regulated as such.