Regulatory Wire: Do Fiduciary advocates now have the Obama faction on their side? Treasury speech offers hope.
Insurers step from behind the curtain with lobbying letters; big names in family office world sign on to the fiduciary fight
Fiduciary standing for brokers is in Congress’ hands, and it looks like the best interests of the brokerage industry will prevail over the best interests of the investing public, a perversion of Congressional duty to protect public trust. The Obama administration has been missing in action when it counts. Deputy Treasury Secretary Wolin could have had significant influence in the debate, playing a leading role, had he spoken up earlier, but now the horse is already out of the barn. Too litte, too late. This seems to be becoming a disturbing pattern.
One can only hope that they get at least this one thing right. Insisting upon a fiduciary standard for all who give financial advice will clean up a lot of this industry overnight.
If the fiduciary standards are not passed people may move to fee-only financial planners. I want to be able to sell my clients the different products and I want them to know I will be looking out for their best interest, a true win/win. All those cold calling financial advisers need to get out our industry so true comprehensive financial planning can lead the industry.
It is about time that we do have a regulatory “standard” like any profession. ~late or not. I don’t care who steps in be it the Democrats or Republicans. There seems to be something really wrong with selling advice that “only lines the pockets” of the advisor meaning commission based advisors versus fee-only planners who really can sell me any product based on “my” individual needs as the client. I really wish as a lay-person who needs my money managed and needs a financial plan that I could have peace of mind through a governing body that doesn’t base advice on commissions. After much digging and a few referrals I am so happy I went with a Fee-only planner. I only wish that Fee-only planners along with our government could look at what England recently did and take note. Americans are in trouble and we need to get the sharks commission based advisors out of the water and get some true unbiased advice. I’ve told all my friend’s and family to look at Fee-only and this article from England. It’s time for change. ~ “England seems to be getting it right with this update.” http://news.bbc.co.uk/2/hi/business/8589042.stm
Sandy I love the article about England, but do you see what I was saying about wanting to sell. I look at it from the heart of a true Financial Planner if I was a fee-only adviser then when I recommend a person to an insurance policy ( that is perfect for them) the insurance company would make money off of it for years and I wouldn’t be able to make a passive income from it. What I believe would work is if Planners could recommend the best insurance company for the situation and not be the puppet of just any one insurance company.
I have done extensive research into Fee-only financial planners versus commissioned-based advisers before making a decision on my money. The thing I like about Fee-only planners is that they act in my best interests as the fiduciary regulated by the state. They are the ones who act as my advocate while my money sits with a broker. They don’t touch the money but do the “selling” quarterly and watch my money and rebalance my portfolio. I think you are not seeing the point of the article which England has nailed. Essentially, I do want someone who “can sell” me a product or service but with someone who is not concerned with just being “able to make a passive income from it” as you are so willing to admit. If I were to sit with someone who was making a decision on what they were selling me based on future earnings that are going to line their pocket then I would have to say that they really don’t have my best interests in mind. A Fee-only planner works on hourly basis and makes decisions with me based on my needs not on what he will be “getting” in the future. Selling is great, but you have to remember the ethics. My Fee-only planner can offer me any product, any service and not be “pushing” product or “selling” me an insurance company based on what he will be getting but what I will need or more importantly and quite possibly give me advice that I may NOT need that service, that product or that insurance company in the first place. What if I don’t need the insurance policy and can self insure? How are you going to get paid if you don’t recommend me an insurance policy or more importantly, would you recommend I don’t need the insurance policy? How can I guarantee that? A clearer example, would be simply, I don’t want my doctor being paid on something he is “paid” to prescribe for future medication that I am taking. How absurd is that? I am willing to pay someone who will actually act in my best interests and give me advice on what I need in the first place. My doctor doesn’t get paid on an active or passive basis on the number of pills I will be buying in the future. As a person who has worked long and hard for my money and who will ultimately want my estate, my portfolio and my financial plan looked at for years to come I couldn’t make a decision to go with a commission based adviser who basically would sell me something and then forget about it or me for that matter. It is not always about selling someone “the product” it is about the advice given without any “passive” strings attached. In this country, before the housing collapse the country needed mortgage advice but instead got mortgages,... horrible ones the likes of which we have never seen before and creating a horrible housing collapse – ultimately creating a mess,... it destroyed the stock market, it ruined the cash out values of annuities and it lead to the highest level of poverty in this country that we have never seen before.
Brandon, I hope you don’t take this personally but in short, where was your advice before this mess?
While you were worrying solely about your passive income from which insurance policy you were “selling” your clients perhaps you might have helped them not take out the 'interest-only’ loans that destroyed an entire housing market. I know you don’t sell homes or mortgages but advice, true un-biased advice goes beyond just products that provide you a “passive” income.