Fred Slack 

2953 Silverton Drive 

Dallas, Texas 75229 

April 8,201 0 

Department of Labor 

200 &nstitution Ave. NW 

-9 

wa~hingt~~ DC 202 1 o -".. - --,--- -- A- --- -- 

Re: Proposecl Change Relative To IRA Advice 

I real the athched article re- propose&dmga in IlRA invwtment rules and 

simply hk my btad in totd disbew. The dm- saw that the nS,mtmd of Labor is 

proposing a rub that would ~~~~&oncd based bb mcs relative to W. 

Iam mthepro~hwelIin~butIm&n~~itwillhavc theopposite 

effect fq which itk mmt. 

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4. explain. ., , .. . , . .>- .. '. ,I. ' . ,* .:-.'.';$-

- . - .:. 

Clients can effectively bndk their investments in three ways. They can attempt to do 

this th-lves without the heip of an advisor. However, studies show that,historicalIy 

those using an advim out perform tho% do'i it on their om. hvgtas & 

prone to mood swings based upd the recmt past, They bccomc more aggressive after 

the market has done well and became frighten and pull back' when it retrtats. Left to 

their own, they typically buy high and sell low. Additionally, investors tend to chase 

whatever sator has done best last, A good advisor can counsel diversification md the 

importame of keeping yaur eye on long tern results rather than swing back and forth 

trying to time the madcet, which can be a hitless and expensive. ,, , 

Second, a clid Caa hire a Elregidwed ~nved&&t Advisor (RIA)' and obtah advice li9 

paying & &iiCidY ongoing ~i.lg'~~~i~~~~,~t;~lmmy' f& whiohis widilly aF&bnt of &sets am=;, -under . 7 m+agem@;"ThF oosi the'cllnt is 

ulis 

more over time tpsrn the cqwssioned based broker. . il 
Third, they can use a mmmission bed broker. I make use of Amaim Funds for the 

majority of my clients. They are the nation's largest commissioned bad fund rsmily 

and pride themselves on Lower than average expense ratios. This expeme ratio (inclusive 

of 12-13-1 fees) is typically less than a similar no load fund at Fidelity, ignoring the extra 

50 basis points that they probably have to pay the RIA. Yes, there is an upfront 

entry bad. However, many of my clients have enough at American Funds to qualify for 

an entrance at NAV (no load, yet a 1% commission is paid). The smaller client will 

initially need to pay an mtmm bad, but even here over time should pay less, 

Over the years, I have aiways stressed to climb of the importance of taking advantage of 

401Ks, if their employer provides one, and of always fdhg their W. Consequently, 

a large portion of my clients' portfblios is held within hmt munts. Losing this 

would hut down my practice. 

I d- - I help ~IE@lti%-Di"si nXfmb% of wap, Mmy of wllid~~~ not bill fur. 

1. Initially, I help clients by doing some long term planning, determining how much they 

need to -ulate over time to meet their objectives and what annual savings is needed. 

2. I spend countless how teaching clients about investments and the importance of 

creating a balanced portfolio and of not chasing the latest fad or responding to the latest 

headline. 

3. I Help construct diversified portfolios selecting good investment companies with 

above average long term track records, low expense ratios, and tailored to the investors 

risk tolerance given the iadtability of short term volatility. 

4. I monitor on these portfblios and them funds and re-1y report to clients. During 

bad times, 1 do a lot of hand holding and additional counseling. 

5. I help clients when loved ones die by walking them through the logistics of making 

claim and changing the registration of assets. - - - 

6. I periodically rerun long term financial plans determining whether changes are needed 

as a mult of change8 in abjcctivt; initial ammptio116, or performance. 

Frankly, I think I do a Iot fbr my clients and 1 receive a bt of positive feed back. The 

smaller client pays a larger percentage to enter a fund but with less dollars and a smaller 

12-B-1 fee, is no more profitable. The smaller client takes the same, if not more, initial 

time planning, teaching, and hand holding. However, even the smaller client should pay 

less for these over the than they would with an RIA. 

Over the past decade, small brokerage IS have seen a dramatic increase in overhear 

primarily related to fees and to compliance. This takes more and more time each year 

aad gets more and more expensive. Taking away a large portion of our bushess would 

effectively shut our dm. I have spent the past 25 years building a successfid practice 
and find it hard to believe that the government would destroy this overnight. 

Additionally the timing of this, given today's cocky economy, could not be worst, both 

for me, and more importantly, for my clients. 

Please take tbis into account before cnacting such a radical change. Tt won't help my 

cliente. 

\ Yours tmly, 

Fred Slack 
I . pT;" ~dea Likeb To Shake Up IRA A#'' , . T ,,. Page 1 of 2 

I 'i -* 

FA New 

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New Rules Likely To Shake Up IRA Advice 

The bpadmmt of Laws push to expand thr Wlllly of ob- Inveshant advice wlll llkely shake things up for 

Wers who advfse dlmb on lndivldual retimmnt ~~xounts. 

Finandl a-ts who haven't paid atkdon to toe m~uhtd nmly rules, bell9vim they apply only to advice 

given on 401 (k) and Win other reUrrrment @am, may be swprls~l to learn big dmqea are comlng for IRA Inveshmnt 

advlca. 

'Status quo Isn't going to work, partlarlady for the IRAs," says Jason Robwk, s partner at law Rm Relsh a Releher in Los 

Angeles. 

.> - YwPw-- - -:- 

unblasad advice at reasonable co8b to retirement plan pddpants and heliclwies. The proposal cow amld a bdr 

push by hmhm and reguletws, folkwlng M rPrarket up- and Imrm scandals of the past 18 months, to 

mtbte ftnandal advisors to put their ants' In- first. 

The IU~ wwld requlre Rnanctal rdvlmm MMed wlth a fund or inarumnce company to ufbr ad- through an lndependgnt 

compertef model or ensum that bhe w- that finmdal erdvhm, Mr mploysn or empbyers' aPRllates receive 

doem? depsndlng upan the Imt choices a dbnt mekm In hls r6thmt plan. AbmaUvdy, flnandal advlms can 

pdda educabk~eml information about asset dassw and allocatlodut not sm InwMment advice. 

"Ka going to IM dcal br the Rnanctal advis#>rs to understand the difimme behem dudon and -and In what 

capdy they an affea educatbn vemm advke: says Amy Gtynn, dlmtot of wtirememb at Comlth Financial 

kdwork, an Independent broker&&r. Moi flnaW advlmrs now dmtundwstand Wi dMnetion, she says. 

Clients whose brokers say they an7 provide specific acfdca on retirement plans because they hewe incentives to recommend 

mtaln funds wsr others mlgM wander what ather patentlal owrfllcts exlst In the relatlwrshlp, &meys say. 

The proposed rules could Increase use of mlbd wrap accounts for IW, In which clients pay a fee based on the size of 

thdr ret(mmmt account. They could also bad Qo the meation of nw Inmt pmfuds. 

"If adopted, I thlnk Ws going to cause a fundamental shift In the ways these firms do buQm,* John Simmers, dl-r of risk 

management and pdud development for the Compllaw Peperhnent lnc. mnsultlng Rm, of the Labor Depms 

pmpsal. 

ram has no prefemd or exdusive financial arrange pdud pmvldm, Glynn says. 

ensure Commonwedth flnandd advlsors don't haw Inmlives to recommend oedaln pr~vfders over others. 

Commonwealth also seee an oppwtunity b remR advisorn who flnd it dlcult to prwkle mtirement plan MCEI at their 

CUM employer. 

Friday's proposal was part of the Whk House Middle Clatis Task Force's year-end report mbsed by Vioe PresMent Joseph = 

Piden. Unldng Wen to the rules signah the prlarlty the dmini-n pl- on objective investment advlm, Roberts says. 

Bidan's lnvohrement Is also a slgn the propod satMed I~km who have Introduced simllar mthment Avke legklatbn. 

"The mrn llne Is that the newly pmposd nrle isn't all that dlfhmnt from the old one," Mmb Wagner, of the Wagner Law 

Group In Bosh, says, referring to rules the outgpl~ Bush ~ls~tbn Lssued early lad year, whkh wem sathd by the 

Obama admln~tion. "Certaln fln-l Indhthm are Ilkely to be very Interested In Ihe n6w nrle, but 1 suspect the folks 

who had problem with the '09 rub will most likely have problems with the new oms, boo." 
The Labar is accepting comments abut the pmpo~ed rules unlll May 5. 

Cwydght (c) 2010, DOW Jones. For more inlom#ltlon %bwf Dow Jones'sewbs foradwirm3, we dick hem 

You seem to have ml& a coupk of things. Thg rub were not fhe mlt of VP Biden's tasldorce, thy am to Implement 

the Pendon Pmtdon Ad of 2006. The pmvisbns in tb rub me all cxrnlalned In ihe statute and are federal law! 

- Your ongoing urn of the term YnmW acMW Is pmbknwk You uae hat tam for blh nq~ktmd mpwmnhWw of a 

brpker4~ler lundhnlng as sales-s under fedad kw and tbse who am either MvMualIy regMeW or acting as 

-Ihs of mglstmtd I~atment a- who are under a dm law and alw funclkdng # flduckdet~ It Is 

MblurrlngdZhelLlebetw;eenMehrw~~~~MIn~lawandIn~HII that hasalroadypwedtheHousg 

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Plea= togln to write mrnrnenb. 1 

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Lwin 1 Lagout