June 30, 2018
Greetings,
I believe the proposed rules, introduced April 18th, do not adequately explain broker and adviser differences.
The proposed rules depict broker and adviser conduct as essentially the same. This depiction is confusing and wrong. The legal, contractual, business and cultural differences dividing brokers and advisers is important and must be clearly stated and explained.
Registered investment advisers involve a relationship between two entities, the client and adviser. In a broker relationship there are three entities involved – the company that is manufacturing and/or selling the investment or insurance products, the customer purchasing the products, and the broker in the middle who earns a commission for products sold.
In my practice as an hourly, fee-only, financial advisor over the past 14 years I have noticed that the general public often assumes that an adviser is acting only in their best interest. Folks often come to me after they have learned they were sold a financial product that is not in their best interest.
Kindest regards,
Tom Nowak, CFP®
Quantum Financial Planning LLC
31470 N Ranch Rd
Grayslake, IL 60030