Editorial

Advisers who are already fiduciaries should shout it from the rooftops

Prospects don't always know what it means to be a fiduciary, but they know what they want to hear when asking an adviser if they are one

Apr 16, 2017 @ 12:01 am

+ Zoom

The concept of fiduciary duty might not yet be fully grasped by consumers, but it is starting to make inroads into mainstream discourse. Clients don't always know what it means to be a fiduciary, but they know they should ask if their adviser is one — and know the answer they want to hear.

With that in mind, a lot of savvy registered investment advisers have been hoisting the banner of fiduciary status as a means of distinguishing themselves from brokerage reps who adhere to a suitability standard.

A full year after the initial unveiling of the Department of Labor's rule requiring advisers to act as fiduciaries when overseeing retirement accounts, the outlook for full implementation remains unclear.

RULE DELAY

The initial implementation has already been postponed to June 9 from April 10, which might frustrate some hardcore proponents. But as consumers become aware of what it means to be a fiduciary, the rule itself is in some ways becoming less significant.

As lawmakers, lobbyists, regulators, consumer advocates and industry representatives continue to wrangle over how and when the rule should take effect, the true fiduciaries can and should leverage the momentum by boldly touting their status.

It's difficult to predict the ultimate outcome of the DOL rule, but the heated year-long public battle has already accomplished much simply by making the public aware that there are differences among financial advisers.

(MORE: The latest on the DOL fiduciary rule, from all angles)

Any true fiduciary has an obligation to proceed as if the rule has already taken effect, and to promote that status on business cards, websites, blog posts and press releases, especially when communicating beyond the structured confines of the financial services industry.

HIJACKED LABELS

Just as stockbrokers seldom describe themselves as brokers anymore — everybody is now called a financial adviser or consultant — there is reason to suspect the fiduciary label could eventually be hijacked or become watered down.

But that's a concern for another day, and something else to keep the many battling parties in Washington busy.

For now, actual fiduciaries —– the advisers already putting their clients' interests first — have every right to ride this wave for all it's worth.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

Events

Why are most advisers stuck in the trenches?

What are top advisers doing to stand out? Scott Conroy of Carson Group offers some strategies for success.

Video Spotlight

The Search for Income

Sponsored by PGIM Investments

Recommended Video

Path to growth

Latest news & opinion

How does your advisory firm stack up?

Comparing a firm's pay to the competition can point out vast flaws.

10 signs your client is cheating on you

Sure signs that clients may be on the way out the door.

Morgan Stanley sees slower fee-based asset flows on fiduciary rule delay

Flows to advisory accounts, while still higher than the start of 2016, dropped off more than 20% from Q2 and were the lowest in a year.

How adviser salaries stack up to other jobs

Median compensation hovers just under $100,000 on the low end and reaches nearly $300,000 for bosses.

Finra ranking brokers in effort to crack down on industry's bad apples

All 634.403 reps have been ranked based on factors such as prior regulatory disclosures, disciplinary actions and employment history.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print