Jul. 25, 2018
Dear Chairman Clayton:
I am writing in regard to the proposed rules on conduct standards for broker-dealers and investment advisers to share some information about my practice and how I do business.
As a CERTIFIED FINANCIAL PLANNER PROFESSIONAL(TM) professional and hourly financial adviser, I spend approximately 70% of my time and effort on "non-securities advice" such as financial planning issues involving goal setting, retirement capital needs, education funding, tax strategies, insurance reviews, estate planning, employee benefits, and similar. The remaining 30% of my business activities involve furnishing investment advice through consultation. My clients seek my services because they are comfortable implementing on their own and do not want continuous supervision or management of an account, which I do not offer.
I do not sell any products other than my time on an hourly basis, and I do not receive any income other than the hourly fees that my clients pay me. I am free to recommend whatever products are in my clients' best interests. In addition, I am free not to recommend any products at all. For example, if it is in a particular client's interest to pay off a mortgage rather than invest money in securities, I have no conflict of interest in recommending that course.
My fees are transparent and clear. I have a service agreement for every engagement that states a firm fee range for the engagement and details how that fee range is calculated. Any follow-up services, such as annual reviews, are covered by new service agreements so that clients always understand the cost of the work before choosing to move forward.
I operate on a philosophy of low-cost, index investing and seek to help my clients minimize trading fees and expense ratios of the funds I recommend. I do not sell insurance or proprietary products or engage in principal trading. Any material conflicts of interest I may have are listed on my ADV and resolved in favor of the client.
I humbly submit the above information in hope you will see the significant differences between my business practices as an RIA/IAR and the business practices of broker-dealers. Thank you for your consideration.
Respectfully,
Abby Kovach
Abby Kovach, CFP®
Principal
Abby Kovach Financial Planning, LLC
A Registered Investment Adviser