How about eliminating broker-dealer sidesteps?

Now let me see if I’ve got this straight. The president of the Securities Industry and Financial Markets Association uses the pages of this periodical [“Exemption rule decision no victory for consumers,” April 16] to complain that the public will not be well served by the recent repeal of the broker-dealer exemption rule.
Can we take a few moments to analyze Marc Lackritz’s points?
First, he states that the decision of the U.S. Court of Appeals for the District of Columbia Circuit will lessen the range of choices available to consumers. He argues that there will be a disincentive for broker-dealer firms to offer fee-based accounts. Why should this be the case?
Second, he indicates his belief that, while regulated differently, investors receive robust regulatory protection from both investment advisers and brokers, and that one should not be seen as being more stringent than the other. Really?
Then, he goes on to say that every trade by a broker has to be “suitable,” while investment advisers offer “back end” protection — the ability to sue if the fiduciary standard was breached. He appears to opine that the suitability standard actually could be viewed as being preferable. While the public might be able to be convinced that this is the case, I certainly would hope those in our industry see through this.
While I’ve read and reread this article, there is one thing missing: Never once does he talk about the other option that the brokerage firms have; register their salespeople as advisers, hold them to a fiduciary standard, and stop sidestepping the intent of better service and protection to clients.
Is it possible that this isn’t presented because the brokerage firms are afraid of the potential liability that comes with this higher standard? Have they seen that their sales practices and high-fee/commission products don’t mesh well with being a fiduciary? Are they stating that they would rather take options away from the end client rather than just complying with the law?
I’ll let you decide — you can tell where I stand.
Finally, the question is posed to the Denver-based Financial Planning Association whether it would like to reconsider its lawsuit and support New York- and Washington- based SIFMA’s request to the appellate court for a rehearing. I suggest to the FPA that it borrow a line from the movie “Pirates of the Carib-bean,” and simply say “I am disinclined to acquiesce to your request. It means no.”
John Ritter, CFP
Ritter Daniher Financial
Advisory LLC
Cincinnati
Don’t seek a benefit without creating profit
It is seldom that I feel compelled to comment on an article but “Quotas tied to benefits irk advisers” [March 19] requires me to do so.
Why does an independent adviser expect to be treated as an employee? I would appreciate it if Chris Cooper were to pay part of my health insurance and administer the plan. Of course, I do not plan to join his firm or run any business through him, but should not someone pay this for me and my family?
Chris manages $200 million in assets. That means his firm’s gross is at least $2 million. A good [health maintenance organization] plan for him and his family tied to a [health savings account] would be around $10,000 per year or less.
To ask the insurance company to give you a benefit without creating profit for it is ridiculous. The quotas are spelled out in your dealer agreements. Reading contracts is part of being a business owner. You want to be independent and run your own firm? Then quit whining and run your business, and lose the employee attitude. If not, go work for Edward [D.] Jones [& Co. LP of St. Louis].
The financial lives of 100
million-plus mutual fund investors with $8 trillion of investments are needlessly and adversely affected by a culture of low expectations and lower real rates of return.
Steven Larsen
Owner and president
Steve Larson Investments
Minneapolis

Social Security fix: Make fund a home lender
Since 1995 I have been sending Republicans and Democrats a solution to creating a “lock box” for the Social Security Trust Fund.
I call it the “Social Security Mortgage Trust.” It would provide non-deductible mortgage loans to U.S. home buyers. If the market rate on 30-year mortgages were 6%, the SSMT rate would be 4.75% to 5%. This would increase 1040EZ filers, reduce the need for mortgage deductions and provide real investment to the Social Security Trust Fund.
West Virginia would hold $2.2 trillion in realty-backed mortgage notes with principal and interest repayment schedules to fund future Social Security demands (after 2017). Congress would have to raid some other pot, because it takes real money to buy houses.
No privatization would be necessary, and we would stop digging a bigger hole. This should have been done in 1983.
Also it would reduce our exposure to the Federal Home Loan Mortgage Corp. of McLean, Va., and the Federal National Mortgage Association in Washington. My experience has been Republicans want privatization and Democrats want tax increases and neither party really wants to do anything because then they could not spend the money.
Keith Diffenderffer
San Diego
A.G. Edwards & Sons Inc.

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