From: Mark Hyland [mailto:markh@hylandfinancial.net] 

Sent: Monday, June 22, 2015 11:47 AM

To: EBSA, E-ORI - EBSA

Subject: RIN # 1210-AB32

Once again the government is attempting to fix something that isn’t broken. A tweek here or there 

may make some sense rather than a complete overhaul that will harm those that it’s attempting to 

save. Over and over again, government overreach veiled as “coming to the rescue” of poor ol’ John 

or Jane Doe, has consistently created a much bigger problem than the one it’s attempting to solve. It’s 

one thing for bureaucrats to theorize a perfect world scenario, but practical implementation is 

another. However, I do agree there should be a uniform fiduciary standard of care applicable to all 

professionals providing personalized investment advice to retail clients. A uniform standard of care 

should consist of the following: 

• A professional should act in the best interest of the customer without regard to the financial or 

other interest of the broker, dealer, or investment advisor providing the advice; 

• A professional should provide advice with skill, care, and diligence based upon information 

that is known, or should be known, about the customer’s investment objectives, risk tolerance, 

financial situation, and other needs; and 

• A professional should disclose material conflicts of interest, avoid them when possible, and 

obtain informed customer consent to act when such conflicts cannot be reasonably avoided. 

Any regulation in this space should make it easier for investors to receive high-quality, individualized 

investment advice from a trusted advisor, not harder. Investment services for retirement savers with 

small account balances will likely become cost prohibitive because of increased compliance costs and 

the likely alterations to the independent broker-dealer fee model. The changes to what would and 

would not be considered “investment education” will likely curtail the effectiveness of investor 

education outreach with regards to plan participants and IRA owners. The inclusion of decumulation in 

“investment education” is commendable, but the prohibition on stating specific investments in 

educational pieces will lead to investors having less knowledge regarding investment options. “Roboadvisors” and other emerging technology platforms can provide asset allocation, portfolio 

rebalancing, or risk tolerance advice at a modest price point, but they cannot provide the life 

events/financial planning services that bring employers and participants into the retirement savings 

system and keep them in the system during fluctuations in the market. This is especially true for 

investors nearing or already in retirement that need professional financial advisors to assist them with 

decisions related to estate and tax planning, making their retirement assets last, medical concerns, 

major life changes, hospice care, etc. 

Improved disclosures would address many of DOL’s concerns that have led to the proposal. Investors 

can make better choices when they are properly informed of the differences between the advice and 

services being offered. In order to provide investors with the information that they need, investors 

should receive concise, consolidated disclosure documents written in plain English. 

The following disclosure approach would be beneficial to investors: 

• A short-form document focused on the issues that are of greatest importance to investors that 

would be provided in electronic format at the point of engagement. The document would 

include: 

• The standard of care owed by the broker-dealer to each client; 
• The nature and scope of the business relationship between the parties, the services to be 

provided, and the duration of the engagement; 

• A general description of any material conflicts of interest that may exist between the brokerdealer and the investor; An explanation of the investor’s obligation to provide the brokerdealer with information regarding the investor’s age, other investments, financial situation and 

needs, tax status, investment objectives, investment experience, investment time horizon, 

liquidity needs, risk tolerance, and any other information the customer may disclose; 

• An explanation of the investor’s obligation to inform the broker-dealer of any changes in the 

above information; A phone number and/or email address the investor can use to contact the 

broker-dealer regarding any concerns about the advice or service they have received; and a 

description of the means by which a customer can obtain more detailed information regarding 

these issues free of charge. 

• Expanded disclosure that would provide investors with access to full details via the brokerdealer’s website or brochures to be provided free of cost. Utilizing hyperlinks and other 

internet functionality, investors would be able to access the following information in areas 

where they desire additional detail: 

A detailed schedule of typical fees and service charges; The specific details of all 

arrangement in which the firm receives an economic benefit for providing a particular 

product, investment strategy, or service to a customer; and other information necessary 

to disclose material conflicts of interest. 

The proposal would unnecessarily restructure the securities, insurance, and banking industries - our 

industry is highly and effectively regulated by the SEC, FINRA, and state regulators. There is already 

redress for bad actor activity in the retirement market through enforcement actions brought by the 

above regulators.

The DOL has stated on multiple occasions that retail clients are generally well served by our industry. 

The costs related to the proposal’s implementation are severely understated, which is very typical 

of more government involvement. Just think of the costs building new disclosures, website 

functionalities, legal fees, training, etc. that small firms such as mine will have to bear in complying 

with the proposal. The internet disclosures and data retention/request requirements are overlyburdensome and will require the development of entire new systems that the industry has never 

contemplated, thus generating astronomical compliance costs. All of these costs will inevitably be 

passed along to consumers thereby increasing costs instead of reducing them, which I understand to be 

the goal of this legislation!!!.

The “legal list” of assets prevents advisors from being able to recommend products that very well may 

be in the best interest of an investor. The list should be removed from the proposal or expanded to 

include more products. 

The exemption creates a new private right of action that was never authorized by ERISA or any other 

related statute. Furthermore, there are already federal and state remedies that are available to 

consumers who feel that they have been harmed by a broker-dealer and other advisors. 

The requirement that a customer sign the contract “pre-engagement” will create an unnecessary hurdle 

to customers even engaging with a financial professional to understand his/her potential investment 

options. Any such contract should be provided and signed at the point of sale. 
Some other concerns with the proposal:

• Fiduciary status should be deemed to arise at the point of sale, not at “first contact,” as is 

proposed. 

• The proposed grandfathering provision will require that virtually every single account be 

repapered or that advisors not provide any further service on the account. Therefore, it needs 

to be replaced with a more conventional grandfathering clause that is tied to the date of 

purchase, irrespective of continuance of service on the account. 

• The current applicability date of 8 months is inadequate because there is no way that the 

systems and disclosures required by the proposal can be developed in such a short time 

frame. 

Advisors are in business to provide a service to individuals and businesses who need help with their 

financial planning. They spend the majority of their time pursuing their chosen 

profession. Rudimentary common sense financial education was nowhere to be found in the 

general educational curriculum that these people received during their school years and as such, 

these same people need access to advisors who have dedicated their professional lives to 

understanding the financial go-to’s that have to be implemented in order for those people to have 

successful outcomes to their financial plans.

A tweek here or there may make some sense, but this proposal as currently outlined will end up 

hurting those its intended to help. This proposal will limit financial advice to those that need it the 

most. They will end up removed from access to the advice that they so badly need and that’s a real 

shame. Those that are fortunate enough to be in line for the advice will take-on additional costs that 

will be shouldered by advisors and their broker/dealers and passed through to them - that’s a real 

shame as well. 

Mark G. Hyland

Hyland Financial Strategies

1250 S. Third Street

Louisville, KY 40203

(502) 637-4733

(502) 400-3583 (Direct Phone)

(502) 400-2815 (Direct Fax)

Visit us at: www.hylandfinancial.net

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FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a 

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