Updated Thursday, December 18, 2014 as of 6:49 PM ET

Building a Business on Fiduciaries

A fiduciary standard for the planning industry remains, for now, a mirage: The U.S. Department of Labor said recently that an expected summertime announcement would be deferred until next year. The SEC doesn’t seem to have established a timetable.

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Comments (2)
For those with dreams of the FP community rising to become a respectable profession, this is shattering.

1. Do pillars of the FP community think it's "fiduciary" to present the impression of investing in a mix of diversified asset classes, while instead diverting the client's money into less-diversified, riskier gambles within the asset classes? It's certainly great as excuse for extracting advisor fees, splashing in oceans of statistically meaningless "data" concerning tens of thousands of those gambles. And great for profit for the source of all that "data." But for the investor, it is misguidance presented under cover of blatant dishonesty. It's the SWITCH.

2. Do pillars of the FP community think it's "fiduciary" to divert investor attention from the uncertainty of results for the investor's future needs and goals to his fear of volatility for the individual year? No, it diverts the investor from seeing his real risks, for his future - and diverts his attention from seeing the long-term costs of those advisors' fees. It's the HIDE.

3. Do pillars of the FP community think it's "fiduciary" to adopt a maze of procedures and papers presented for best interests of advisors instead of investors, to shield advisors from investor-lawsuit liability? And piously call it "fiduciary"? Not when it's cover for perpetrating the self-serving, fee-extracting, empire-building HIDE and SWITCH outlined above.

Are there, within the FP community, pillars of comprehension and character who will stand to expose and close this self-serving, investor-misleading-and-fleecing malpractice? Expose it from within the FP community? Before it's exposed from outside, disgracing the FP community and the very term "fiduciary," shattering the dream of a true FP profession? We'll see.

Dick Purcell
Posted by Dick P | Wednesday, June 18 2014 at 9:01PM ET
I have to say, Dick, I don't understand your comment at all. The "pillars" as you call them are just people, like you and me, and the people I talk with have more allegiance to their clients than to themselves. The brokerage firms would say that makes them poor business people, but the brokerage firms have been losing market share to these independent advisors for decades.

Shattering the dream? I think the "dream" as you call it is very much a reality in the independent advisory/planning profession. I just wish the SEC realized that.
Posted by ROBERT N V | Thursday, July 03 2014 at 12:34PM ET
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