All Financial Advisers Should Act as Fiduciaries

As you know, I am a huge fan of the section of the financial reform bill that calls for studying the effects of two standards of care for financial clients: fiduciary status and suitability. I believe ALL financial advisers should act as fiduciaries, placing their clients best interests ahead of the adviser's best interests. The brokerage community is levelling an attack at the single standard policy, and the SEC is going to conduct a study on whether or not the two standards should be replaced with the single fiduciary standard.

If you agree with me, please retype the SEC link I have provided, and share your opinions. If you want to include a letter, I have written a "boiler plate" letter that you can cut and paste, personalize, and attach on the SEC's website. Just sign your own name, or feel free to make any changes to the letter.

www.sec.gov/cgi-bin/ruling-comments?ruling=4-606&rule_path=/comments/4-606&file_num=4-606&action=Show_Form&title=Study%20Regarding%20Obligations%20of%20Brokers%2C%20Dealers%2C%20and%20Investment%20Advisers"

Here is a sample letter for you:


RE: File No: 4-606
Dear Ms. Murphy:
I am a client of a financial adviser who holds a fiduciary standard. I believe that all who hold themselves to be part of the financial services industry should act as a fiduciary. It is unfair to consumers that the quality of advice they receive from a financial professional is dependent on the professional’s registration or title. It’s no wonder consumers are confused, and do not know whether their financial professional is looking out for their best interests.
I recognize and understand that the advice that my financial professional gives me is in my best interest because their loyalty is to me first; they advise me with utmost good faith; they manage any conflicts of interest that may harm me and disclose those conflicts to me; they are paid for the advice they give me and the investments they select for me; and they are required to choose from the best investments available, keeping my interests first. The fee or commission model does not impact whether or not a financial adviser can act as a fiduciary, as products in either compensation model can hold a fiduciary standard.
As a fiduciary, my adviser can choose to operate in a business model that is best for me. The key is fully disclosing, and avoiding and fairly managing conflicts of interest. Providing financial advice with fiduciary accountability does not reduce services to middle Americans. It insures that the services consumers receive will be in their best interests -- not in the best interests of the financial intermediary or his or her company.
I urge you to recommend to Congress that it is necessary and appropriate in the public interest and for the protection of consumers to extend the fiduciary standard to broker-dealers, who provide personalized investment advice, and to initiate a rulemaking to achieve this long overdue consumer reform.
Sincerely,
**Your name here**