Comments for Clark At Large http://clarkatlarge.com Bob Clark’s latest Investment Advisor articles Sat, 06 Mar 2010 22:26:18 -0500 http://wordpress.org/?v=2.8.4 hourly 1 Comment on End Game to the Fiduciary Issue? by John http://clarkatlarge.com/2010/03/01/end-game-to-the-fiduciary-issue/comment-page-1/#comment-9596 John Sat, 06 Mar 2010 22:26:18 +0000 http://clarkatlarge.com/?p=124#comment-9596 Everone has "vested" interests and some of these remarks seem to be droppings from farm animals. The SEC is studying the issue and the advisory committee acknowledges that there may exist a fiduciary duty on broker at times. The broker polls by SEI are meaningless. I don't think that it matters that a broker says lets be held to a fiduciary standard when they may not even realize the implications on the firm. So much of these discussions revolve around the fact that the RAND report indicated the public couldnt tell the difference and assumed that everyone was working in their best interest. Can you really imagine if laws were decided on what people think or want? I have yet to see any member of the FPC have its members or franchisees vote on all issues and yet they are saying that the SEC should invoke universal fiduciary responsibility because an illiterate public cannot differentiate. The inmates are running the asylum. Everone has “vested” interests and some of these remarks seem to be droppings from farm animals. The SEC is studying the issue and the advisory committee acknowledges that there may exist a fiduciary duty on broker at times.

The broker polls by SEI are meaningless. I don’t think that it matters that a broker says lets be held to a fiduciary standard when they may not even realize the implications on the firm.

So much of these discussions revolve around the fact that the RAND report indicated the public couldnt tell the difference and assumed that everyone was working in their best interest.

Can you really imagine if laws were decided on what people think or want? I have yet to see any member of the FPC have its members or franchisees vote on all issues and yet they are saying that the SEC should invoke universal fiduciary responsibility because an illiterate public cannot differentiate.

The inmates are running the asylum.

]]> Comment on End Game to the Fiduciary Issue? by Kevin Condon http://clarkatlarge.com/2010/03/01/end-game-to-the-fiduciary-issue/comment-page-1/#comment-9538 Kevin Condon Fri, 05 Mar 2010 17:00:24 +0000 http://clarkatlarge.com/?p=124#comment-9538 This is just not the time to give up, folks. When brokers favor fiduciary status 2 to 1 and the professional advisory associations favor it nearly unanimously, we push ahead. If we all want it, it's only because we know our clients want it and that the standard is right. So, its time to muster the courage to stand for our principles. The times we live in favor those who don't accept the "judgement" of the vested interests and the government agencies that protect them. It's our profession and our community. We know what's right. So, let's go for it! Let's differentiate ourselves so that the public knows where to get fiduciary advice and gets even more clarity on what "real" advice looks like. How about a little leadership on this, Coalition! Time to say "no" to the agencies that want to tell us what is ethical and what is not. If they can't do what is right, they are corrupt. It's our duty to override them and hold to a higher standard without asking their permission to do so. This is just not the time to give up, folks. When brokers favor fiduciary status 2 to 1 and the professional advisory associations favor it nearly unanimously, we push ahead. If we all want it, it’s only because we know our clients want it and that the standard is right. So, its time to muster the courage to stand for our principles. The times we live in favor those who don’t accept the “judgement” of the vested interests and the government agencies that protect them. It’s our profession and our community. We know what’s right. So, let’s go for it! Let’s differentiate ourselves so that the public knows where to get fiduciary advice and gets even more clarity on what “real” advice looks like. How about a little leadership on this, Coalition! Time to say “no” to the agencies that want to tell us what is ethical and what is not. If they can’t do what is right, they are corrupt. It’s our duty to override them and hold to a higher standard without asking their permission to do so.

]]> Comment on End Game to the Fiduciary Issue? by Kevin Condon http://clarkatlarge.com/2010/03/01/end-game-to-the-fiduciary-issue/comment-page-1/#comment-9536 Kevin Condon Fri, 05 Mar 2010 16:00:32 +0000 http://clarkatlarge.com/?p=124#comment-9536 This is just not the time to give up, folks. When brokers favor fiduciary status 2 to 1 and the professional advisory associations favor it nearly unanimously, we push ahead. If we all want it, it's only because we know our clients want it and that the standard is right. So, its time to muster the courage to stand for our principles. The times we live in favor those who are don't accept the "judgement" of the vested interests and the government agencies that protect them. It's our profession and our community. We know what's right. So, let's go for it! Let's differentiate ourselves so that the public knows where to get fiduciary advice and gets even more clarity on what "real" advice looks like. How about a little leadership on this, Coalition! Time to say "no" to the agencies that want to tell us what is ethical and what is not. If they can't do what is right, they are corrupt. It's our duty to override them and hold to a higher standard without asking their permission to do so. This is just not the time to give up, folks. When brokers favor fiduciary status 2 to 1 and the professional advisory associations favor it nearly unanimously, we push ahead. If we all want it, it’s only because we know our clients want it and that the standard is right. So, its time to muster the courage to stand for our principles. The times we live in favor those who are don’t accept the “judgement” of the vested interests and the government agencies that protect them. It’s our profession and our community. We know what’s right. So, let’s go for it! Let’s differentiate ourselves so that the public knows where to get fiduciary advice and gets even more clarity on what “real” advice looks like. How about a little leadership on this, Coalition! Time to say “no” to the agencies that want to tell us what is ethical and what is not. If they can’t do what is right, they are corrupt. It’s our duty to override them and hold to a higher standard without asking their permission to do so.

]]> Comment on End Game to the Fiduciary Issue? by David Lucca http://clarkatlarge.com/2010/03/01/end-game-to-the-fiduciary-issue/comment-page-1/#comment-9527 David Lucca Thu, 04 Mar 2010 16:43:45 +0000 http://clarkatlarge.com/?p=124#comment-9527 "That means neither the House nor the Senate versions of financial services re-regulation contains any change in the current fiduciary status quo." Sad commentary on the state of concern for investors by elected officials. “That means neither the House nor the Senate versions of financial services re-regulation contains any change in the current fiduciary status quo.”

Sad commentary on the state of concern for investors by elected officials.

]]> Comment on End Game to the Fiduciary Issue? by Tom Grzymala http://clarkatlarge.com/2010/03/01/end-game-to-the-fiduciary-issue/comment-page-1/#comment-9464 Tom Grzymala Wed, 03 Mar 2010 16:28:11 +0000 http://clarkatlarge.com/?p=124#comment-9464 Unfortunately it appears, as it's always appeared, that combining broker/ dealers with fiduciary duty is like mixing oil with water. Wall Street is the huge elephant in the room and it won't be budged. They've got the bucks that Capitol Hill wants and gets. Coming from FINRA a B/D SRO to the SEC whose mission is to protect the consumer is more oil and water. With all the other political/ economic issues on the front burner this issue has probably fallen off the stove and will need many heavy-lifters to bring it back. Unfortunately it appears, as it’s always appeared, that combining broker/ dealers with fiduciary duty is like mixing oil with water. Wall Street is the huge elephant in the room and it won’t be budged. They’ve got the bucks that Capitol Hill wants and gets. Coming from FINRA a B/D SRO to the SEC whose mission is to protect the consumer is more oil and water. With all the other political/ economic issues on the front burner this issue has probably fallen off the stove and will need many heavy-lifters to bring it back.

]]> Comment on Ode to Chicken Little: Further Fighting About Fiduciary by Nancy Brenner http://clarkatlarge.com/2010/02/22/ode-to-chicken-little-further-fighting-about-fiduciary/comment-page-1/#comment-8398 Nancy Brenner Mon, 22 Feb 2010 18:43:08 +0000 http://clarkatlarge.com/?p=121#comment-8398 Congress doesn't know what the heck it's doing, does it? Congress doesn’t know what the heck it’s doing, does it?

]]> Comment on Client Beware? Harold Evensky’s Definition of Fiduciary by John http://clarkatlarge.com/2010/02/07/client-beware-harold-evensky%e2%80%99s-definition-of-fiduciary/comment-page-1/#comment-8290 John Sat, 20 Feb 2010 15:31:25 +0000 http://clarkatlarge.com/?p=116#comment-8290 Jan I would think that consumers would be worse off in a world where rebating was allowed. They could be sold inferior policies simply by an agent offerring larger rebates. Cost then becomes the consideration. There are a number of no load annuities available through Vanguard, Schwab, Fidelity, Rowe Price and Jefferson I believe as well. However the consumer is not going to read the documentation and many fee only planners are so anti annuity that they fail to consider them. Your suggestion about having two versions of most contracts may make sense but I say that without having any idea it may cost to prepare documentation. Possibly states should either require planners to have insurance licenses without being affiliated with any company or enforce the current requirements for giving advice. That begs the question if you give insurance advice when you are not licensed have you broken the law or have you broken the law only when you are caught? Jan

I would think that consumers would be worse off in a world where rebating was allowed. They could be sold inferior policies simply by an agent offerring larger rebates. Cost then becomes the consideration.

There are a number of no load annuities available through Vanguard, Schwab, Fidelity, Rowe Price and Jefferson I believe as well. However the consumer is not going to read the documentation and many fee only planners are so anti annuity that they fail to consider them.

Your suggestion about having two versions of most contracts may make sense but I say that without having any idea it may cost to prepare documentation.

Possibly states should either require planners to have insurance licenses without being affiliated with any company or enforce the current requirements for giving advice. That begs the question if you give insurance advice when you are not licensed have you broken the law or have you broken the law only when you are caught?

]]> Comment on Real World Woes: Steve Winks, the Fiduciary Duty and Independent Broker/Dealers by Stephen Winks http://clarkatlarge.com/2010/01/25/real-world-woes-steve-winks-the-fiduciary-duty-and-independent-brokerdealers/comment-page-1/#comment-8102 Stephen Winks Fri, 19 Feb 2010 22:53:52 +0000 http://clarkatlarge.com/?p=110#comment-8102 Tim, You are absolutely correct, the consumer should expect the advisor to act in their best interests, but brokerage firms deny their brokers the ability to act in that capacity and attorneys like Stanley counsel brokerage firms not to prpperly resource brokers so they can act ibn the client's best interest. It's all about the best interests of the client not the self interest of the brokerage firm. SCW Tim,

You are absolutely correct, the consumer should expect the advisor to act in their best interests, but brokerage firms deny their brokers the ability to act in that capacity and attorneys like Stanley counsel brokerage firms not to prpperly resource brokers so they can act ibn the client’s best interest.

It’s all about the best interests of the client not the self interest of the brokerage firm.

SCW

]]> Comment on Real World Woes: Steve Winks, the Fiduciary Duty and Independent Broker/Dealers by Tim Wyman http://clarkatlarge.com/2010/01/25/real-world-woes-steve-winks-the-fiduciary-duty-and-independent-brokerdealers/comment-page-1/#comment-8088 Tim Wyman Fri, 19 Feb 2010 15:58:48 +0000 http://clarkatlarge.com/?p=110#comment-8088 I wonder how the arguments and positions hold up or change if we re-frame the issue to the clients’ point of view rather than the advisor or broker. Want to see a client’s head turn sideways like my curious canine? Begin a conversation regarding suitability and fiduciary obligations. What? You are not obligated to act in my best interest all of the time? Isn’t that why I come to you? I wonder how the arguments and positions hold up or change if we re-frame the issue to the clients’ point of view rather than the advisor or broker. Want to see a client’s head turn sideways like my curious canine? Begin a conversation regarding suitability and fiduciary obligations. What? You are not obligated to act in my best interest all of the time? Isn’t that why I come to you?

]]> Comment on Client Beware? Harold Evensky’s Definition of Fiduciary by Jan Sackley http://clarkatlarge.com/2010/02/07/client-beware-harold-evensky%e2%80%99s-definition-of-fiduciary/comment-page-1/#comment-8087 Jan Sackley Fri, 19 Feb 2010 14:55:02 +0000 http://clarkatlarge.com/?p=116#comment-8087 Edward, The dilemma of arranging for a client to invest in an insurance or annuity product without a commission is one that has been created by the insurance industry and by state regulatory requirements. By the industry in the sense that no-load, no commission annuity products are few and far between. State regulatory requirements fail consumers on this point because most states do not permit licensed agents to rebate commissions to the client. The whole model needs to change to enable consumers to purchase such products directly from insurers without load when they are self-directing, and to permit commission rebates when the contract is facilitated by a fee-only advisor who is licensed as an insurance agent. Even better, states should permit the insurer to have an annuity option with no commissions so that the advisor can use that version of the annuity contract, because rebating could be deemed income to the client rather than a cost reduction of the contract. Jan Sackley, CFE Fiduciary Foresight, LLC Risk and Regulatory Compliance Consultants 269-323-8119 jan@fiduciaryforesight.com Twitter@jansackley Edward,

The dilemma of arranging for a client to invest in an insurance or annuity product without a commission is one that has been created by the insurance industry and by state regulatory requirements. By the industry in the sense that no-load, no commission annuity products are few and far between. State regulatory requirements fail consumers on this point because most states do not permit licensed agents to rebate commissions to the client. The whole model needs to change to enable consumers to purchase such products directly from insurers without load when they are self-directing, and to permit commission rebates when the contract is facilitated by a fee-only advisor who is licensed as an insurance agent. Even better, states should permit the insurer to have an annuity option with no commissions so that the advisor can use that version of the annuity contract, because rebating could be deemed income to the client rather than a cost reduction of the contract.

Jan Sackley, CFE
Fiduciary Foresight, LLC
Risk and Regulatory Compliance Consultants
269-323-8119
jan@fiduciaryforesight.com
Twitter@jansackley

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