After reading the comments on my first two posts about “who owns advisory clients,” I have to say that you all make good points, but at the same time, you miss THE point. It’s an emotional issue, to be sure: One fraught with feelings of disloyalty, betrayal, and ingratitude. Consequently, it’s easy to react to those highly-charged feelings with knee-jerk accusations of underhandedness, client-stealing, and yes, Morris, illegality and unethical behavior. Then, once firm owners have morally rationalized their gut reactions, the next step appears clear: have new professionals sign non-solicitation or non-compete agreements so this sort of thing can never happen again.
Archive for June, 2007I recently received an email from a financial planner who “felt he had to respond” to my writing about what it means to be a fiduciary. As a licensed insurance agent and registered rep, he repeated the usual rationalizations about why it’s “better for the client” to be charged a commission (while side stepping the apparently minor technicality that their “advisor” doesn’t actually work for them). And he even came up with a new one: it’s his fiduciary duty to be an agent, because no one can handle his clients’ insurance needs as well as he can. Kudos for creativity, if nothing else. Yet, his lengthy tome (why do defenders of commissions always write gothic novels about it?) eventually got around to an interesting point (kudos to me for reading that far). To wit: A fee-only planner on a call-in radio show refused to help a widow buy Treasury bonds by saying his fee would be too high. I’ve received quite a few e-mails over the past two weeks regarding my June column on the CFP Board. Surprisingly, to me anyway, not one of them has been in support of the Board. Most have been from long time advisors, and one or two have even been from past Board members, who revealed that contrary to the opposition of many members, market share has always been the main focus of the Board. These e-mails have reminded me of a conversation I had with Elissa Buie a couple of years ago. I ran into the past FPA chairperson at a reception two FPA national conferences ago. That must have been about the time the Board hired Sarah Teslik as CEO, so I asked Elissa what she thought about it. Her answer has stuck with me since. “You know, Bob,” she said with her soft Virginia drawl. “Frankly, I just don’t think that much about it. I’m just not sure how important the CFP Board is to financial planning anymore.” |
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