October 27, 2010
I supervise 60 RR's and this is a bad idea.
Right now market forces drive fee levels. Investors who wish lower fees have a plethura of investment options to choose. All fees on mutual funds and variable annuities are disclosed multiple times on forms presented to and signed by the investors as well as publically available in multiple forums for comparison including FINRA's own website. If investors want lower fees there is nothing stopping them from comparison shopping and choosing that option.
Let's be honest. Registered Reps (RR's) are salesmen. By arbitrarily depriving a salesman of incentive to service existing client's accounts they will simply spend more time on soliciting new business and less time on maintaining old business, especially smaller accounts. The unintended consequence of this rule will be to deprive the very people you seek to help the professional advice they sought in the first place.
KENNETH CUSICK:
AGENCY COMPLIANCE OFFICER
PARK AVE SECURITIES
NY PERLMUTTER