July 28, 2010
I comment in the role of a consumer who has used a financial advisor(s) for more than 25 years.
The so-called "suitability rule" under which financial advisors are supposed to practice is fine as far as it goes. However the disclosures to the client are somewhat deficient. They should also include the broker-dealers and banks with whom the advisor does business and the percentages of assets placed with each (to allow the client to see if there is a preponderance of assets with a particular broker-dealer/bank and all the potential problems associated with such dealings). Additionally, the disclosure should include whether the advisor is paid any money, receives any commissions, discounts, or "in-kind" services, or receives any other largess from his broker-dealers/banks (for all the usual, obvious reasons).
I'm sure there are many other deficiencies in the present rules, but the above has always been a "biggie" in my estimation.
Thank you for allowing me to comment.