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.
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.
