The Irony of Crying Foul When you Made the Bad Throw

???????????????????????????????A few weeks back, I wrote a blog explaining what Fiduciary Duty really means. In this blog I talked briefly about proposed changes on the part of the Securities Exchange Commission (SEC) to the fiduciary standard. As a fee-only provider, these changes will likely have little to no impact on the way we do business, as we continue to put the client first and offer services based what is in their best interests.

However, it is safe to say that many advisors are a bit nervous about the changes that appear to be coming down the pike. Specifically, broker-dealers are at risk of huge changes to their practice model – a model that generally involves pushing products that might not serve the best interest of the client, but certainly will allow the broker to bring home a hefty paycheck at the end of the month.

Fee-based providers and broker-dealers are bracing for these sweeping changes in the coming months.  According to a recent article in Benefits Pro the changes could end up costing each broker-dealer upwards of “$8 million to set up compliance systems and $2 million a year to maintain.”  The article goes on to say that the new rules will take away the broker-dealers’ ability to “recommend any of their own products to investors or make commissions on the investments they propose to their clients.”

In a survey conducted this past spring by the National Association of Insurance and Financial Advisors, a whopping 84 percent of financial advisors suggested that the cost of running their business would rise if the SEC makes their proposed changes. Additionally, nearly half (44%) of those surveyed indicate that these increased costs would be passed on to their clients in the form of increased fees.

The interesting thing in all of this is that the only people who are crying foul are those who currently charge clients for products that might not serve their best interests – in essence, those who do not operate within the Fiduciary Standard.  With that in mind, it begs the question…what if everyone treated clients in the manner they deserve?

I hate to have a “you mess with the bull, you get the horns” mentality, but it seems to me if we just do our job in an ethical manner to begin with, we would not be affected when the legal system finally catches up.

About Objectively Speaking

Tom Batterman, founder of Vigil Trust & Financial Advocacy and Financial Fiduciaries, LLC is in the business of representing the best financial interests of his clients. Having provided objective, fee-only financial management services for over two decades, he specializes in managing the investment and related financial affairs of individuals and mutual insurance companies who do not have the time, interest or expertise to manage such matters on their own. As an objective, unbiased professional who takes on a fiduciary responsibility to his clients, he guides clients to the financial decisions they would make themselves if they had years of training and experience and the time and expertise to fully research and understand all of their options. Founded in 2010 as an outgrowth of Vigil Trust & Financial Advocacy, Financial Fiduciaries, LLC is a financial management solution for individuals and mutual insurance companies who recognize they do not have the time, interest or expertise to properly attend to their financial matters on their own. While there are many financial “advisors”, most of them have investment products to sell and the “advice” they provide is geared toward getting their clients to engage in a purchase. As one of the rare subset of advisors known as “fiduciary advisors”, Financial Fiduciaries does not sell any investment product so its guidance is not compromised by conflicts of interest which plague ordinary advisors. Prior to his employment in the financial industry in financial advocacy and trust positions, he worked at a private law practice in the Wausau area in the areas of estate planning, tax, retirement planning, corporate organizations and real estate. He is a graduate of the University of Wisconsin-Madison and the UW-Madison Law School and has during his career held Series 7, 24 and 65 securities licenses. A longtime resident of the Wausau, Wisconsin Area, Tom is active in the community. He enjoys golf, curling, skiing, fishing, traveling and spending time with his family.
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