Industry Weighs in On Bachus-McCarthy Proposal

[Stephen Winks]

Under FINRA supervision and oversight, brokers are neither accountable for their recommendations nor does the broker acknowledge any ongoing responsibility for their recommendations. In fact under FINRA, brokers do not render advice and in fact violate internal brokerage industry compliance protocol if they claim fiduciary standing which requires the consumer's best interest to be served. To have FINRA be the regulatory authority governing advisory services is unquestionably counter to the best interest of the investing public. This is indisputable.

On what basis does Bacaus and McCarthy advance their proposal--are they even aware that is is counter to the best interest of the investing public.

As for NAIFA voicing insurance industry interests which are opposed to fiduciary standing, the insurance industry will never consent to fiduciary standing where insurance agents have ongoing responsibilities for their recommendations like advisors. In England and Australia, where fiduciary standing is required of all advisors to include insurance agents, more than half of insurance agents left the business. Is this the constituency Bachus-McCarthy serve or is it the best interest of the investing public.

Bachus and McCarthy have sold out the best interest of the investing public they are charged to protect.

This is why the trust and confidence of the investing public has been lost when regulators protect the best interest of the financial services industry rather the best interest of the investing public.

SCW

[Bradly T.]

I'm confused....for years you've been posting here "that in all of history, consumer's best interests come first in free markets". You were called a nut job then........you're still one though you're certainly lying out of the other side of your mouth now. So now you're into what we had BEFORE when you screamed for "uniformity" and homogeny and the harmonization of the industry - an industry that you are not and never have been a member - not planner, nor advisor, nor representative. Yet you persist with opinions about that which you have no experience. Please DO NOT try to present the public's or BD's "best interests" as you have the advisors' best interest...oh ye of Cheneyesque aim.

[Doug K]

Unbelievable. Could the article be any more slanted towards the advocates of a suitability standard vs. true fiduciary responsibility? I left the broker-dealer/registered rep world because of the hypocrisy and self-serving acts of so many "advisors" who regularly put the needs of their wallet ahead of those of their clients! NAIFA has no business even running their mouth in this discussion as nearly every single one of their registered members are simply gloried insurance agents who have gotten a Series 6/63 so they can sell high-cost variable life and annuities, and pocket the huge commissions!

Rather than throw my clients under the bus, and leave them to the mercy of so many of the vipers in the insurance/registered rep world, I chose to create my own RIA and to sit at the table beside my clients rather than across from them. FINRA's rules-based mindset will do nothing to protect the investing public, but it will do much to enhance its revenue if it's allowed to regulate RIAs/IARs. The organization is more inclined to fine members over real or perceived violations of its rules rather than truly ensure that the best interest of clients are taken care of. I'm still waiting for someone to clearly show that a rules-based model is going to ensure the client's best interest will come first, from initial contact to a lifelong relationship (i.e. meeting a fiduciary standard).

If FINRA is eventually successful in winning the fight to regulate RIAs, it may very well be time to throw in the towel and emigrate to Australia!

[Stephen Winks]

Bradley T,

In the history of man the best interests of the consumer has always prevailed in a free market. I will let you reason through whether investors prefer their best interests being served to whether their advisor prefers to act against the best interest of the consumer.

It pretty obvious to me and the investing public. And in England and Australia fiduciary standing in the best interest of the investing public is required by law, which in my opinion should be the case here in the US.

The question here is whether the trust and confidence of the investing public is the primary regulatory focus or whether the best interest of the brokerage industry the primary regulatory focus. Let's hope for the well being of the industry that the best interest of the investing public prevails.

SCW