IN’s Cooper: The fiduciary comments I’d like to see

As the new Dodd-Frank legislation requires, the Securities and Exchange Commission now has six months to study whether a fiduciary standard; a first step in this process is gathering input.

As the new Dodd-Frank legislation requires, the Securities and Exchange Commission now has six months to study whether a fiduciary standard — in some shape or form — should be applied to all those proffering financial advice.
A first step in this process is gathering input, so on Tuesday, the SEC asked for comments. I’m sure there will be many thoughtful comments from every organization that’s in the business of issuing comments: SIFMA, the CFP Board, NAPFA and others.
There probably also will be insightful opinions from planners, advisers and brokers, as well as knowledgeable attorneys, investment bankers and even many ordinary investors.
Here are some comments I’d like to see, although I suspect few would be willing to be as transparent as these fictitious opiners.
“We believe strongly in a fiduciary standard for all advisers. We would like such a standard to be principles-based, and this is our principle: We know the right and wrong products and services to sell to individuals. In short, if we decide what you should buy, it’s the right choice for you. This should be the standard for everyone.” — Principal, LaDeeda Securities
“How am I going to make a living if you make me sell the lowest-cost products? Only bureaucrats care about price; as long as I make my clients happy, they couldn’t care less about price.” — Broker, Hutton Dillon Securities.
“A fiduciary standard is incomplete without a commitment to financial purity. I believe that all advisers should go through an SEC-mandated spiritual cleansing ceremony in which they rid themselves of any negative thoughts and evil impulses. Only then will a fiduciary standard truly benefit mankind.” — A no-fee, no-commission adviser and chairman of the National Association of Itinerant Financial Professionals
“It is clear that a broker-dealer operating under a fiduciary duty that generally falls under 1940 Act Section 4F-g5 would be in violation of provisions under section 13(g)-62a of the 1934 Act. Clearly, this is a risible breach of the entire section 16c-3 argument, as clarified under the 1975 amendments. Don’t you agree? — Attorney
“As the chairman of an independent broker-dealer, we believe that our clients are the registered reps, not the individual investor. For that reason, we support a fiduciary standard in which the rep comes first. Placing the rep’s concerns and interests above those of everyone else will alleviate much of the confusion surrounding customer complaints and will make for a contented and efficient work force. And isn’t that the purpose of regulation?” — Richard Watson, Golden Advisor Securities
“What do you guys want from me? I run a bare-bones discount-brokerage firm that charges 2 cents a trade. If customers want a paper statement, they have to send me the paper to write it on. I don’t give a damn what crap they buy or sell, as long as they trade. Why should I have to make sure they’re acting in their best interests? I don’t even act in my best interests.” — Bob Roberts, Bob’s House of Trades
“Mary, you’re so hot. Talk fiduciary to me.” — Adviser, Little House of Advice, Las Vegas