New NAPFA chairman ready for fight over fiduciary standards

William Baldwin says he also plans to spearhead a diversity initiative

Sep 2, 2009 @ 2:19 pm

By Sue Asci

Preserving the traditional definition of a fiduciary is the biggest challenge facing the National Association of Personal Financial Advisors, according to William Baldwin, who officially began his one-year term as NAPFA’s chairman yesterday.

NAPFA is weighing in on a range of issues being debated on Capitol Hill as part of the federal government’s regulatory reform drive, said Mr. Baldwin, who is the president of Pillar Financial Advisors Inc.

“Regulation is the biggest challenge,” he said. “We are fighting against changing the definition of fiduciary.”

NAPFA defines a financial adviser as a fiduciary who is “required to act with undivided loyalty to the client. This includes disclosure of how the financial adviser is to be compensated and any corresponding conflicts of interest.”

The existing fiduciary standard is principles-based and requires that advisers always put the client’s interests first. Some groups are proposing that the standard be more specifically defined and become rules-based.

“It would be almost impossible to encompass everything in that definition,” said Diahann Lassus, co-founder and president of Lassus Wherley & Associates PC, and the former NAPFA chairwoman.

“Trying to provide a specific definition for all aspects of a fiduciary duty would have the perverse consequences of diluting protections for investors because you are bound to miss something and create loopholes.”

Mr. Baldwin said NAPFA’s primary objectives include positioning the organization as the first choice for fee-only advisers, and making it the first place to go for consumers looking for an adviser, Mr. Baldwin said.

To do that, NAPFA will continue to enhance its educational offerings and membership development and increase its visibility among consumers through its members and public relations efforts, he said.

“We also want to … explore what we could be doing to attract a more diverse group to become financial planners,” he said of an initiative he proposed at a strategic planning meeting two months ago.

By 2050, Mr. Baldwin noted, “more than half of the country will be what we now consider minorities.”

“If you have a lack of representation, you’re going to be missing the mark,” he added.

The organization is seeking ideas on how to craft a study of the issue, he said.

Mr. Baldwin served on the national board of NAPFA for three years.

Prior to that, he served as a member of the association’s regional board for three years.

The organization is a member of the Financial Planning Coalition, as are the Certified Financial Planner Board of Standards Inc. and the Financial Planning Association.


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