July 23, 2018
1. Overall, do you find the Relationship Summary useful? If not, how would you change it? If so, what topics and how can they be improved?:
The description fails to make it clear how the so-called "fiduciary" relationship would generally cost the investor more than commissions on trades.
2. How useful is each section of the Relationship Summary? Please consider explaining your responses in the comments:
a. Type of Relationship and Service: Useful:
b. Our Obligations to You: :
c. Fees and Costs: Useful:
d. Comparison to different account types: Useful:
e. Conflict of Interests: Useful: The brokerage house should prevent brokers from churning accounts or selecting inappropriate investments to generate commissions. If things work the way they should, those brokerages that fail to do that would go out of business.
f. Additional Information: Useful: I like my current relationship with my broker just fine and do not want it changed.
A couple of years ago, a representative from Fisher Investments came to my home and wasted about an hour of my time telling me about how they would manage my assets as a fiduciary and only charge me 1.5% of the portfolio value to do so.
Essentially all my investments are in dividend-paying assets and a 1.5% fee based on the average value of the portfolio would take 25% of my dividend income. I cannot imagine them achieving enough asset appreciation to offset that bloated fee without investing my money in shaky "growth" stocks. A 1% fee based on the portfolio would still take 17% of my dividend income.
If stock brokers should act as fiduciaries, then so should real estate brokers, car salesmen, refrigerator salesmen, and especially insurance salesmen. After all a lot of people buy a house, a car, a refrigerator, and yes, life insurance that is inappropriate for their financial situations.
The diabolical misanthrope who decided that all stock brokers and asset managers should act as fiduciaries must own a lot of stock in Fisher Investments.
The song and dance that the fiduciaries give is that their fee structure makes them gain when the investor gains. However, they will get their fat fee even if the investor is losing money.
A pox on the bastard who is trying to force that fiduciary concept on everybody who is trying to build a nest egg. Investors would be much better off just buying a couple of Vanguards index funds.
g. Key Questions to Ask: :
3. Please answer the following questions. Please consider explaining your responses in the comments:
a. Do you find the format of the Relationship Summary easy to follow?: Yes:
b. Is the information in the appropriate order?: Yes: A description of brokers buying one "loaded" fund and then selling it soon after to buy a more "suitable loaded" fund is not vivid enough. That seems like fraud to me.
c. Is the Relationship Summary easy to read?: Yes:
d. Should the Relationship Summary include additional information about different account types?: Yes:
e. Would you seek out additional information about a firm's disciplinary history as suggested in the Relationship Summary?: Yes:
4. Are there topics in the Relationship Summary that are too technical or that could be improved?:
5. Is there additional information that we should require in the Relationship Summary,such as more specific information about the firm or additional information about fees? Is that because you do not receive the information now, or because you would also like to see it presented in this summary document, or both? Is there any information that should be made more prominent?:
6. Is the Relationship Summary an appropriate length? If not, should it be longer or shorter?:
7. Do you find the 'Key Questions to Ask' useful? Would the questions improve the quality of your discussion with your financial professional? If not, why not?:
8. Do you have any additional suggestions to improve the Relationship Summary? Is there anything else you would like to tell us?:
This quest for answers seems unnecessarily lengthy.
I want to express my opposition to forcing fiduciaries on everyone, and did not see the right place to do that.