July 24, 2018

Dear Chairman Clayton,

I am writing to you about the Fiduciary Standard. As a background matter, I have been a practitioner in the wealth management business for four decades, of which the first 30 years in the financial services business and the last 10 years in an RIA. The last 5 years in the financial services business, I served as the Chair and CEO of JPMorgan Private Bank. I left the financial services business because of the multiple conflicts of interest of that business model and the harm to investors.

The two major differences between advisors and brokers are: There is no such thing as divided loyalty. The information asymmetry between the sellers versus the buyers combined with the compensation incentives create a very high probability of abuse. The only solution is caveat emptor where the investor clearly knows who is representing them and who is representing themselves or their firm.

I understand that the SEC proposal actually blurs these lines and could be potentially harmful to investors. I urge you to draw a red line between business models and give investors clear choices.

Sincerely,
Mel

Maria Elena Lagomasino
MANAGING PARTNER & CEO