No. of Recommendations: 12
I know this is a bit controversial, but FWIW, this is my take.

I am an RIA and as such am held to a fiduciary standard, as the SEC defines it (there is more than one definition). The original Dodd-Frank law requires that a fiduciary standard be created for stock brokers and broker-dealers in their recommendations to account holders, but specifically to retirement accounts (retirement plans and IRAs). This delay is to allow more time to study the effect of such a fiduciary standard...although I'm not sure how much more time is required. (note: this does not apply to fixed insurance products, which are regulated by the states)

I frankly oppose a fiduciary standard to these groups. Yes, it sounds great and I'd just love to see stock brokers and other such securities salesmen held accountable for their 'advice'. Like insurance products, vacuum cleaners, used cars and some electonics stores....these people are commissioned salesman. Trying to hold such salesmen to some kind of fiduciary standard would be almost impossible to regulate and enforce and would prove confusing to consumers. I mean, to maintain a fiduciary standard for a salesman would require them to talk about risks and benefits of their products...which is fine...but then would also require speaking about alternatives and their risks and benefits. I mean, is someone who is paid on a commission going to recommend an alternative that would lose the sale? And I can only imagine the kind of litigation activity that will be going on when the market decides not to cooperate.

What makes more sense is for such salesmen to be required to identify themselves as 'sales representatives' or some such term to reflect how they are compensated....and to ban the use of the term 'advisor' or any other related term that suggest they have the investor's interests as a priority to their own.

A part of our economy runs on services provided by salesmen. Those who use salesmen will tell you that they are potentially valuable in providing information on their product lines...information that would be hard for the average buisnessperson or consumer to get on their own. But for this relationship to work, we, the consumer, need to fully understand that these are salesmen whose primary objective is to make the sale. There is absolutely nothing wrong with this. And if the consumer doesn't wish to deal with such a person, but still wishes 'advice', he/she can pay a registered investment adviser directly for it.

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