Advisor Business
Pamphlet For A Single Fiduciary Standard For Financial Advisors Could Be Recalled As A Seminal Document When The History Of The Profession Is Written Decades From Now
Sunday, May 19, 2013 14:12

In a document that reads like a preamble to a single fiduciary standard for financial advisors, Ron Rhoades, an expert on the ethics of financiial advising, has spelled out legal, intellectual, and moral imperatives for regulatory action that would change the relationship between American consumers and advisors.

Rhoades’ immediate goal is to support the Department of Labor and Employee Benefits Security Administration effort to apply ERISA’s fiduciary standard of conduct properly. However, when the history of the financial advice profession is written decades from now, this document seems likely to be recalled as a seminal work.

This Website Is For Financial Professionals Only


 

 

 

Rhoades, who holds a J.D. and CFP, serves as Program Director for the Financial Planning Program at Alfred State College in Alfred, New York, where he is an Associate Professor and teaches business law and advanced financial planning courses. He also owns an investment advice firm. However, in perhaps his most important role, Rhoades has become the financial advice profession’s leading ethicist.

 

Rhoades, in his blog, has written thoughtfully about applying a single fiduciary standard to all financial advisors. Often his posts take aim at Wall Street’s sales-oriented approach to financial advising, but’s he’s also criticized CFP Board for misleading consumers in ads about whether CFPs are obliged to act as fiduciaries always.

 

Rhoades’ post yesterday, entitled, “Common Sense Redux: The Legal And Economic Imperative Behind The DOL/EBSA's ‘Definition Of Fiduciary’ Re-Proposed Rule,” is a pamphlet. Taking a page from pamphleteers that since the 1500’s published on controversial issues, Rhoades makes an eloquent case for the moral imperative for applying a single fiduciary standard to all financial advisors in these three passages:

 

“Efforts to enhance financial literacy, while always worthwhile and important, will never transform the ordinary American into a wholly knowledgeable consumer of financial products and services,” says Rhoades. “Given the sophisticated nature of modern financial markets and complex array of investment products, it is not just the uneducated that are placed at a substantial disadvantage—it is nearly all Americans. Hence, other means are necessary to negate advantages brought on by information asymmetry.”

“Because of the vast information asymmetry, and the many behavioral biases consumers possess which deter them from effectively spending the time and effort to read and understand mandated disclosures, there exists a great need for financial and investment advice,” says Rhoades. “In such situations, our fellow citizens place trust and confidence in their personal financial advisor. It is right and just in such circumstances that broad fiduciary duties be applied to these financial intermediaries. The absence of appropriate high ethical standards for all providers of personal financial advice, whether to plan sponsors, plan participants, IRA account owners, or others, is a glaring current gap in the financial services regulatory structure.”

“Our regulators possess the authority and the ability to ensure that consumers are not misled by the use of titles and designations, and they should ensure that all those who hold themselves out as trusted advisors – or who actually provide advisory services—are bound to act in the best interests of their clients under the fiduciary standard of conduct.”
 

 

 

Read more...
 
MoneyBlock, An Online Independent BD Focused on Reps And RIAs Utilizing Options Strategies, Launches Proprietary Client Management Platform
Tuesday, May 14, 2013 17:17

MoneyBlock, an online broker-dealer serving independent reps and advisors, today introduced a proprietary platform that offers advisors and clients access to comprehensive online account management tools, real-time portfolio data, and easy order entry.

 

This Website Is For Financial Professionals Only


"Headquartered in Chicago’s Financial District, we’re dedicated to servicing Registered Representatives, Investment Advisors, and Independent RIAs, especially those that trade options, and their clients," says MoneyBlock's website. "Our web-based platform was specifically designed to support the unique needs of investment professionals utilizing the same technology that powers our TradingBlock retail model."

 

Customer accounts are cleared and carried by Apex Clearing Corporation, according to a press release..

 

 

 

 

 

Read more...
 
Does The Revelation Of Fees Paid To Advisors From Schwab And Fidelity Taint The Perception That RIAs, As Fiduciaries, Are Above Conflicts?
Tuesday, May 14, 2013 17:01

Tags: compliance | RIAs

Cerulli Associates posted an article today that is sure to enrage some RIAs. It's pretty brave and honest and deserves attention. 

This Website Is For Financial Professionals Only


 

"Traditionally during Cerulli’s research, the registered investment advisor (RIA) channel receives positive coverage," says Cerulli's post on WealthManagement.com, entitled Holier Than Thou. "That’s thanks to the fiduciary responsibility they assume over their end investors’ portfolios, which has led to surging asset marketshare and client growth. However, an issue has emerged as a growing pain in this dynamic sector that must be addressed in order to avoid litigation and negative press, which is so often associated with their broker/dealer counterparts."

 

Holier than thou RIAs would be wise to clean up their own untidy little ethical issues because RIAs are likely to come under increased scrutiny as regulators try to implement Dodd Frank in the months ahead.

 

 

Read more...
 
Why A Uniform Fiduciary Standard Isn't The Answer
Monday, May 13, 2013 16:16

Tags: Dodd-Frank | fiduciary standard

A uniform fiduciary standard won’t change anything if underlying problems plaguing the industry are not fixed first.

This Website Is For Financial Professionals Only


"Let me start by saying that you can’t impose morality and ethical behavior through legislation," says a market professional and cotributor to LifeHealthPro. "An industry centered on money will always attract criminal activity. However, change is coming in the financial services industry, and it’s coming in the form of a fiduciary standard. Unfortunately, those who wish to take advantage of others for personal gain, by nature, do not follow the rules. Therefore, any additional legislation or rules attempting to enforce moral character, in my opinion, will not work."

 

 

Read more...
 
MBA VS. CFA: Here's How To Decide Which One To Get
Tuesday, May 07, 2013 08:05

When considering a career as a private wealth advisor, you have a choice of designatons and degrees. This story looks at getting an MBA versus a CFA.

This Website Is For Financial Professionals Only


For a short story, it's good but anyone considering these options owes it to himself to explore the full range of designations in the private wealth advice field.

 

A4A recently hosted a webinar in which all of the major designations were discussed.

Read more...
 
<< Start < Prev 1 2 3 4 5 6 7 8 9 10 Next > End >>

Page 4 of 75

Login

Banner
Banner
Banner
Banner

Comments

Banner
Banner
Banner
Banner
Banner
Banner