The March 3rd article in the New York Times entitled Trusted Advisor or Stock Pusher? Finance Bill May Not Settle It raised the public profile of an issue that has been swirling around the financial services reform debate for a long time – should advisors in the brokerage industry be held to fiduciary standards (as RIAs are)? The title and content of this piece miss a few very important points:
1) Just because you’re not held to fiduciary standards, you’re not a stock pusher! There are many qualified advisors at brokerage firms, and their motives and reputations should not be questioned just because of where they work. Criticism of the industry is in vogue today – but we shouldn’t lose sight of the fact that there are many qualified advisors out there helping clients.
2) No new regulation (Bill) and no standards are assurance of quality. Clients must still assess whether the advisor that they have chosen is truly acting in their best interest. And advisors must be able to proactively demonstrate to clients – regardless of whether are are a fiduciary by law or not – how they act in the best interest of their clients.
Our next blog will focus on what advisors can do to make their case to clients.
Andy – thanks for keeping us posted on this important debate. Your points are absolutely correct. Patrick