LJ

FirstCommand

FINANCIAL SERVICES

July 15, 2015

Dear Secretary Thomas E. Perez,

As a member of a firm of independent financial advisors and a member of the
Financial Services Institute, I am writing to express my concerns with the Conflict of
Interest Rule Proposal. While I agree that financial advisors and financial services firms
should be required to ensure that the interests of their retirement clients come first, the
Proposal contains other elements that will effectively eliminate the ability of low and
middle-income individuals to obtain the personalized advice they need to ensure a
dignified retirement. In short, the Proposal is unworkable for my clients and my small
business.

Specifically, I see the following significant problems with the Proposal:

1) It is based on False Assumptions: For example, it appears that your department
believes that retirement investors are unprotected by the current regulatory system.
However, my business is heavily regulated by the Securities and Exchange Commission,
the Financial Industry Regulatory Authority and state securities regulators. My broker-
dealer also routinely monitors my activity and examines my business to ensure that I am
in compliance with the many rules and regulations I am subject to as a financial advisor.
In addition, your department argues that financial advisors routinely harm their clients by
directing them to high priced investment vehicles. However, Investment Company

Institute research demonstrates that the opposite is true.

First Command Financial Planning + 720 Bayfront Parkway « Suite 100 » Pensacola, FL 32502 * OFFICE 850.456.9237 + FAX 850.456.9109

First Command Financial Services, Inc., parent of First Command Financial Planning, Inc. (Member SIPC, FINRA) and First Command Insurance Services, Inc.
Financial planning services and investment products, including securities, are offered by First Command Financial Planning, Inc.
Insurance products and services are offered by First Command Insurance Services, Inc.
1 FirstComm Plaza + Fort Worth, Texas 76109-4999 « PO Box 2387 - Fort Worth, Texas 76113 + 1.800.443.2104 + Overseas, Call 1.817.731.8621 - firstcommand.com


1a
FirstCommand

FINANCIAL SERVICES

Financial advisors tend to lead investors to funds whose expense ratios are far lower than
the average expense ratio for all funds. These false assumptions cause the Proposal to be
poorly designed for investors, unduly burdensome and extremely costly.

2) Investors are not well served by the Proposal: The Proposal's requirements
demonstrate a lack of understanding of basic investor needs. The following examples will
demonstrate my concerns:

- First, the Proposal eliminates my ability to provide meaningful education by
prohibiting me from providing investors examples of the investments available in their
retirement plan that fit within the basic asset classes they should be considering. The
result is that these individuals will be left to guess whether or not their investment
choices have resulted in a well-diversified asset allocation.

- Second, the Proposal requires IRA account holders who have not yet decided
whether to use my services to sign a contract with me before I can discuss their
retirement needs. This is simply unworkable because smart consumers won't sign
contracts with people they haven't yet chosen to do business with.

- Finally, the Proposal prohibits the use of a variety of investment products that
can play a meaningful part in my client's retirement planning. I simply can't understand
why your department would limit the tools available to financial advisors who are trying
to help clients achieve a dignified retirement.

3) Reduced Access to Retirement Assistance: I entered the financial services profession
because I wanted to help people achieve their financial goals. However, I can only

First Command Financial Planning + 720 Bayfront Parkway + Suite 100 » Pensacola, FL 32502 * OFFICE 850.456.9237 + FAX 850.456.9109

First Command Financial Services, Inc., parent of First Command Financial Planning, Inc. (Member SIPC, FINRA) and First Command Insurance Services, Inc.
Financial planning services and investment products, including securities, are offered by First Command Financial Planning, Inc.
Insurance products and services are offered by First Command Insurance Services, Inc.
1 FirstComm Plaza + Fort Worth, Texas 76109-4999 + PO Box 2387 « Fort Worth, Texas 76113 + 1.800.443.2104 + Overseas, Call 1.817.731.8621 « firstcommand.com


FirstCommand

FINANCIAL SERVICES

operate my small business if I can cover my costs. Unfortunately, the Proposal's Best
Interest Contract Exemption requires me to adhere to numerous very detailed, costly and
difficult requirements while producing an unprecedented amount of very specific data on
a point of sale, annual, and continuing basis and subjecting me to huge liability exposure.
At the same time, the Proposal requires financial services firms to significantly alter the
compensation structure of our industry thereby reducing my margins. The result is that I
will not be able to continue to advise small and mid-size clients who need retirement
assistance. Without my guidance, I fear that these individuals’ retirement security will be
placed at risk. This is unacceptable in light of the retirement crisis facing our country.

As you can see, the Proposal is based upon false assumptions, fails to appreciate
investor needs and will reduce access to retirement assistance, products and services.
That is why I am requesting that you work cooperatively with the Financial Services
Institute and other industry trade organizations to develop a best interest standard that
protects investors while preserving access to retirement assistance, products and services
for all individuals.

Finally, I would be happy to serve as a resource as you continue to monitor
developments on this issue. Feel free to reach out to me if I can be of service to you.

Sincerely,

Mr. Norbert Karezewski,
Financial Advisor
Email: njkarczews@firstcommand.com

First Command Financial Planning + 720 Bayfront Parkway + Suite 100 « Pensacola, FL 32502 « OFFICE 850.456.9237 « FAX 850.456.9109

First Command Financial Services, Inc., parent of First Command Financial Planning, Inc. (Member SIPC, FINRA) and First Command Insurance Services, Inc.
Financial planning services and investment products, including securities, are offered by First Command Financial Planning, Inc.
Insurance products and services are offered by First Command Insurance Services, Inc.
1 FirstComm Plaza + Fort Worth, Texas 76109-4999 » PO Box 2387 + Fort Worth, Texas 76113 + 1.800.443.2104 + Overseas, Call 1.817.731.8621 « firstcommand.com