PUBLIC SUBMISSION

As of: 6/24/15 9:45 PM

Received: June 23, 2015

Status: Pending_Post

Tracking No. 1jz-8jl6-41rj

Comments Due: July 21, 2015

Submission Type: Web

Docket: EBSA-2010-0050

Definition of the Term ‘‘Fiduciary’’; Conflict of Interest Rule—Retirement Investment Advice; 

Notice of proposed rulemaking and withdrawal of previous proposed rule.

Comment On: EBSA-2010-0050-0205

Definition of Fiduciary; Conflict of Interest Rule-Retirement Investment Advice and Related 

Proposed Prohibited Transaction Exemptions; Hearing and Comment Period Extension

Document: EBSA-2010-0050-DRAFT-0328

Comment on FR Doc # 2015-14921

Submitter Information

Name: John Olsen

Address: 

131 Hollywood Lane

Kirkwood, 63122

Email: jolsen02@earthlink.net

Phone: 314-909-8818

General Comment

The EBSA proposed rule seeks to redress alleged harms to consumers due to the sale, by 

commissioned advisors, of "broker-sold" mutual funds and other instruments. Regrettably, it 

seems to proceed from the unspoken assumption that advisors ought to work for free. In noting 

that commissionable "broker-sold" funds have been far more expensive to consumers than "no 

load" index funds, it ignores the fact that fee-compensated advisors using such index funds must 

charge for their services. I was unable to find any indication that the FEES that those feecompensated advisors charge were taken into account in the reckoning of how "expensive" each 

type of fund is. 

Moreover, the "Best Interest Contract" requirements are very poorly thought out. What advisor 

will, or even should, WARRANT that his compensation is "reasonable", without any indication 

of what that term will be held to mean? "Reasonable" according to whom? 

This "contract" appears to mean that an advisor is committing to the consumer that he will 

recommend only "the best" product. What does that mean? Who will judge what "the best" 

product for a particular consumer, in a particular situation, is or would be? Is an advisor to be 

Page 1 of 2

https://www.fdms.gov/fdms/getcontent?objectId=0900006481b50827&format=xml&show... 6/24/2015
held accountable for reviewing EVERY SINGLE PRODUCT AVAILABLE IN THE 

MARKETPLACE before making a recommendation? What if that advisor CANNOT 

recommend a particular product because she is not, and cannot become, appointed with the 

company issuing that product?

What factors will regulators and those exercising jurisdiction over product sales take into 

account in determining "the best" product? Premium level, for an insurance product, cannot be 

such a metric. Often, the lowest premium will produce a product that has little chance of 

persisting for the time required. Will the cost of certain options be judged "unnecessary"? 

The current "suitability" standard applicable to insurance agents and registered representatives 

offering products to qualified plans and IRAs already provides strong protections for 

consumers. As one who does considerable work as an Expert Witness in litigation involving 

insurance and investment products, I can state with confidence that the "suitability" standard 

DOES NOT permit an advisor subject to that standard to ignore the client's best interest and sell 

anything he or she wishes, regardless of its suitability for the client. 

Many advisors who now offer needed and valuable advice to consumers with modest portfolios 

will not do so if they are held to an expensive-to-observe and dangerously vague standard of 

care. Those consumers will lose access to professional advice that they need, arguably much 

more than those with large portfolios.

The EBSA needs to work with the SEC in crafting a standard of care that is both equitable (for 

ALL concerned) and WORKABLE!

Page 2 of 2

https://www.fdms.gov/fdms/getcontent?objectId=0900006481b50827&format=xml&show... 6/24/2015