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The two dramatic moments everyone was buzzing about at the MarketCounsel conference

Elliot Weissbluth, Knut Rostad, Charles Goldman and Joe Duran helped show us why thought leadership begins when sparks fly

Author Brooke Southall September 18, 2012 at 3:41 PM
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Knut Rostad demanded to know what Elliot Weissbluth meant by 'zero conflicts of interest.'

Stephen Winks

Stephen Winks

September 18, 2012 — 7:01 PM

Knut asked the right question of Elliot, soliciting supporting facts, and Elliot had the right answer, in but only in general.

Of course, the devil is in the detail which Knut sought and Elliot did not provide.

The important point to be made here is that none of the roll-up firms at the Market Counsel conference could provide the detail Knut was looking for which is needed if a broker or advisor represents themselves as an advisor acting in a fiduciary capacity.

The point that Elliot, Charles, Shirl and Ron need to make is their respective firms can make advice and fidiciary standing safe for advisors to acknowledge so it is scalable, easy to execute and manage as a high margin business at the advisor level at a lower cost than a packaged product. That would not only be news worthy, but it would transform the financial services industry as we know it. It would empower the advisor to add value in ways not possible in a broker format, it would be provably in the best interest of the investing public, it would be far less expensive than commission sales, address and manage and unprecedented level of investment and administrative values and add value in tangible, quantifiable ways again not possible in a brokerage format.

What is missing is (a) a simplifying authenticated prudent investment process (asset/liability study, investment policy, portfolio construction, monitoring and management) which makes advice safe, (b) tied to a functional division of labor (Advisor, CIO, CAO) which makes advice scalable, easy to execute and manage as a high margin business which provides expert personalized advice, not posible in a transactions format, (c) utilizing advanced technology in portfolio construction which facilitates transparency and continuous comprehensive counsel required for fiduciary standing, (d) conflict of interest management which has crippled the brokerage format from being responsive to the best interests of the investing public, and (e) expert advisory services support for each of the ten major market segments (Mass, Retail, HNW, Ultra HNW, DC, DB, Foundations and Endowment, Taft-Hartley, Public Funds, Profit Sharing) advisors serve.

There is still a distinct product focus in roll up firms that belie their fiduciary language which requires translation into the client focus required for fiduciary standing. It has been easy for rollups to simply extrapolate the brokerage format, when an advisory format is in order. Knute is simply calling the question, where are the necessary enabling resources necessary to make advice and fiduciary standing safe, scalable, easy to execute and manage as a high margin business—as they are not in existance today.

This is the great debate within the advisory services industry—there is a difference between supporting fiduciary standing in principle and in fact. For the broker, stuck in a brokerage format, who actually in fact wants to act in their clients best interest—large scale institutionalized support for fiduciary standing is required. The opportunity is not just observing that brokerage self interests thwart fiduciary standing, the opportunity is to in fact make fiduciary standing safe, scalable, easy to execute and manage at a lower cost than a packaged product. This is the transformational innovation that will win the market share that every roll up firm is envisioned to achieve.

The important point is the market share is there for the taking, but like Knut, advisors are just not going to take anyone’s word for it. The large scale institutionalized support for expert fiduciary standing must exist in fact, not in principle.

SCW

Kogen

Kogen

September 18, 2012 — 10:52 PM

I think some folks may have missed Joe Duran’s point about “decision making”. It seems some thought he meant specific stock picking investment decisions, but for those of us who were listening carefully to Joe’s presentation, that’s not what he actually said.


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Mentioned in this article:

MarketCounsel | HamburgerLaw
Compliance Expert, RIA Set-up Firm, Regulatory Consultant
Top Executive: Brian Hamburger

United Capital Financial Advisers
RIA Welcoming Breakaways
Top Executive: Joe Duran

Focus Financial Partners, LLC
Consolidator/Roll-up Firm
Top Executive: Rudy Adolf

Carson Group
Consulting Firm
Top Executive: Ron Carson



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