July 20, 2015

U.S. Department of Labor 

Office of Regulations and Interpretations

Employee Benefits Security Administration

200 Constitution Avenue, NW

Washington, DC 20210 

Re: Definition of the Term “Fiduciary”; Conflict of Interest Rule—Retirement Investment Advice 

(RIN 1210-AB32)

Ladies and Gentlemen: 

Thank you for the opportunity to provide comments regarding the Department of Labor’s 

(“Department”) Proposed Conflict of Interest Rule (“Proposed Rule”) and Best Interest Contract 

Exemption (“BIC Exemption”) under the Employee Retirement Income Security Act of 1974, as 

amended (“ERISA”). I am concerned that the Proposed Rule and BIC Exemption will unnecessarily 

increase barriers for Middle-Income Americans to the valuable retirement savings education and 

assistance that I and many thousands of other registered representatives provide. It is my hope 

that my comments are helpful to the Department. 

I have been a registered representative with PFS Investments Inc. since 1995. My office is in 

Lakewood, Washington. My clients come from the community in which I live and work. They are 

hard-working, very busy people, and, quite typically, before they meet me, no one has ever taken 

the time to sit down with them to assess their financial picture and discuss basic financial 

concepts with them, such as the power of saving for retirement through systematic investing and 

what investment options are available to them. They, like so many people in Middle America, do 

what they do daily very well, but the reality of life is that there is no time left in the day after 

their work day and evening family commitments end for them to proactively seek out education 

and advice on saving and investing. What some view as basic saving and investing concepts that 

everyone already knows, is typically not information they know. They are starting from a 

different baseline, and it takes a substantial time commitment to understand these concepts well 

enough to make actual investment decisions independently. 

While it may appear that they have access to this information if they have computers or other 

mobile devices from which they can search the internet, they do not, in my experience, access

this information on their own. It is time-consuming and overwhelming. They are much more 

comfortable working with a live person, and more successful when they do so, both of which 

studies have demonstrated.1 And with retirement savings and retirement plan participation at 

 

1 Oliver Wyman: The role of financial advisors in the US retirement market (July 6, 2015). Oliver Wyman states that 

it “. . . was engaged to perform a rigorous investigation of the role of financial advisors in the US retirement 
such low levels, it is imperative that we help Middle Americans in every way possible get on track 

toward ensuring better futures for themselves and their families. 

Working with Middle-Income Americans to achieve their financial goals is what I have done my 

entire career in the financial services industry. A story about a particular client of mine comes 

to mind. 

Several years ago I met a young couple with small children who lived in a duplex and earned a 

modest income. They provided me an opportunity to conduct a Financial Needs Analysis. The 

education I provided taught them how to more effectively pay off consumer debt they were 

paying. It also empowered them to begin saving a small monthly amount in an IRA. They were 

so excited! I spoke with them a few weeks ago. The choice to invest in an IRA helped them 

demonstrate tangible assets, which helped them qualify for their first mortgage. I am pleased to 

say that they continue to save toward their retirement every month. They are even confident 

that they will increase their savings in the future. This couple needed the opportunity to start 

small and grow. They can save more as their income grows but starting, even at a small amount, 

is the key. Many potential investors need to start small and often can’t meet the larger 

minimums of other types of in-person investment services. 

It is my belief that the Proposed Rule and the BIC Exemption as drafted will eliminate or 

substantially reduce people like this young couple’s access to education and advice, at the exact 

time and for the exact purpose they need it most – saving for retirement. I fear that the 

translation of education into advice, the imposition of the new BIC contract, the uncertainties 

created by the Impartial Conduct Standards which substantially increase liability costs and 

effectively disqualify the commission model, and the costs of complying with all of the many 

disclosure requirements will cause firms such as PFS Investments Inc. to conclude that it simply 

is not feasible to open smaller accounts. If a decision like this is made, my clients will lose access 

to the education and advice they so badly need, and their futures will be severely negatively 

impacted as a result. 

It is my hope that the Department will take this into consideration and withdraw the Proposed 

Rule. Thank you again for the opportunity to comment.

 

market, and quantify differences in investing behavior and outcomes between advised and non-advised 

individuals.”