Good morning
This article on Bloomberg (see link) is pretty powerful and covers a lot of different issues. Ths issues on "bad" brokers do not apply to the people on this mailing list but we all are painted with the same brush when it comes to advice.
Once an issue comes to the forefront the discussion takes on a life of it's own and we lose control of the narrative. This is evident by the many articles in the press and by the advertisements of our new competitors. Many firm's have stated that they "in principle" agree with a fiduciary standard but unless forced to adopt by law will continue with the Best Interest Contract (BIC). But we are not powerless to set our own standards as we have tools at our disposal.
First if you are a CFP you have already adopted the Fiduciary Standard and you can tell clients/prospects this fact. But if the investment platform you have chosen for your clients falls under the BIC standard then a lot of the Fiduciary Standard can be rendered a moot point. You can further align your business as a fiduciary by using the discretionary platforms that are at all the firms which by definition are fiduciary platforms. Now your advice and investment platform are aligned with our client's desire to work with us as a fiduciary. There are many other "corporate" issues but those issues are out of our control. I believe we do what we can and learn how to inform our clients of our decisions when it comes to advice, platform and the fiduciary standard.
As PFGC clients know I have been of the opinion that the fiduciary issue was not going away but in fact would intensify on many levels. The SEC is now going to take up the fiduciary issue for all accounts. Will it look like the DOL or the BIC? I don't know but I suspect t will be a lot closer to the DOL than the BIC.
The Cerulli Report I sent out last week showed that 82% of investors want to have a Fiduciary relationship and 6% want a Best Interests Contract (See attached Page 7). As our clients/prospects become more educated to the nuances of the different standards it will be necessary for us to be able to articulate and show our clients that we are aligned with them.
PFGC clients have already told me that clients/prospects are asking them to answer Tony Robbin's 7 Questions to ask a Financial Advisor (see link). It doesn't matter what your opinion is of Mr. Robbins what we do know is that Unshakable is the #1 best seller on Amazon. People follow him.
It is your business and it is in our best interests to run it as a fiduciary.
Danny
"One left-footed step per day"
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