S7-0818

July 30, 2018

To The Honorable Chairman Clayton,

I appreciate the work you are doing on creating an SEC rule to protect consumers of financial advice.

While I think merely taking on this task is a great start, I don't think the current draft does enough to clearly differentiate between advisors (who do not sell) and brokers (who are sales people).

The major difference between an advisor and a broker is in how they are compensated because compensation leads directly to conflict of interest.

As advisors we are compensated by fees paid by the client and not as a result of transactions. Thus we more easily leave the realm of conflicted advice behind and can fit the standard definition of fiduciary care for our clients.

For this reason, I would like to provide you with my perspective as an advisor on why we are different:

• I am a planner and advisor to my clients. The major focus of my services is holistic/ life/comprehensive financial planning, not product sales.
• We place our clients' interests ahead of our own in every instance.
• My colleagues and I are not hired to sell products and are not trained in sales; we are hired to advise clients and are trained in finance and in advice, and have the CFP®, CFA and CPA designations. We are all credentialed, educated, experienced advisors.
• As an RIA, I render fiduciary advice in intimate relationships of two; brokers can only offer incidental advice in sales relationships of three.
• My investment product recommendations are wide and deep, not limited.
• We minimize conflicts by only receiving compensation from client fees; we do not accept commissions, transactional compensation or other third-party payments in connection with my recommendations.
• The fees and the underlying investment costs clients pay are transparent and clear. I offer estimates and annual reports of clients' fees and expenses. There is no confusion: My clients know what they've paid, what I've earned and can measure if my advice is worth what is being paid.
• I do not sell insurance or proprietary products, or engage in principal trading.
• If I have any material conflicts, they are clearly listed on my ADV.
• Advisors are much different than brokers.
• Again, I appreciate your effort spent on this rule and look forward to seeing its next iteration.

Respectfully,

Roger I. Bair, III, MSF, CFP®, AIFA®
Senior Advisor
The Financial Consulate