Subject: File No. S7-25-99
From: Steven A Sant
Affiliation: Certified Financial Planner

September 7, 2004

I am an independent financial advisor in a boutique firm. I earned my CFP in 1993, before I got full time into the profession. I worked for a wirehouse firm for almost five years, but was forced to leave due to good conscience.

This firm, then IDS, purported to be non-biased financial advisors, but in fact forced me to sell only their own manufactured products for the first year. After the second year I was allowed to sell the products of 2 other firms, but I was still paid more if I sold proprietory products. The atmosphere was just short of brain-washing. We werent allowed to attend conferences sponsored by other vendors, only those of my wirehouse. By my third year I had figured out what was out there in the real world, and it took another year+ to get out.

The local management team in Seattle, WA used financial planning as a tool to get people in the door so that we could sell their products. We had quotas on the number of financial plans that we had to sell. As a trainee this seemed like the best avenue that I had to be in the profession that I envisioned, but I was gravely disappointed in the apparent bait-and-switch tactics used to sell stuff to folks. They called us Advisors, and I honestly did the best that I could for my clients with the tools that I had available, but the atmosphere was definately sales. Otherwise, why would there be quotas?

Today, my broker/dealer Commonwealth Financial Network allows me to recommend suitable products from any of their approved vendors. And if they arent approved, CFN will check them out for me. They pay me the same regardless of the vendor, and they have no proprietory products. Our business is more than 95 fee based vs. commission, removing an obvious conflict of interest. In other words, I left a wirehouse that is in need of closer supervision, and went to an independent firm that shared my dream for conflict-free advice.

For the wirehouses to advertise their services as Advice vs. Sales then backpedal when you want to regulate them as advisors, by claiming that their advice is only incidental, should be a huge red flag

The problem is that financial planning is only an incidental source of revenue. But if it is indeed incidental to their business, then it seems that there is a Truth In Advertising problem. This smells funny either way.

So, the obvious answer, if they dont want to be regulated the same as the true financial planners, then they shouldnt be allowed to call themselves anything that resembles, or implies to the public, financial advisors, financial consultants, financial specialists, etc. May I suggest Financial Salesperson.

The SEC should spend their time and efforts where the problems are...where the attitude has been, and will continue to be profit-motivated at the expense of ethics. At the very least, the playing field should be even, so that consumers can make an educated decision about the type of firm they would like to work with.