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Financial Advice - Why Not Put Your Clients' Interests First?
Yesterday a reader sent a copy of the most recent NAIFA newsletter to me pointing out that the last page proudly proclaims that they helped defeat a fiduciary standard in the recently passed financial reform legislation. I've ranted against NAIFA once before and don't intend on attacking that organization again today. But this newsletter did reignite my "clients' interests first" wick!
My position is that anyone offering financial advice (or implying they offer financial advice) should be willing and wanting to put their clients' interests first. An advice-based business where an individual entrusts a professional with skills and training the individual lacks to help them and the professional willingly accepts that trust automatically creates a fiduciary relationship. That is basically the definition of a fiduciary relationship. So, I want to ask the following question and genuinely hope to hear feedback opposing my position.
Can anybody articulate an argument against people offering financial advice putting their clients' interests first?
I have heard the arguments made to date and, in my not so humble opinion, they carry no weight. The primary argument made is that a fiduciary standard will make advice too expensive for most people. That argument is garbage, for a number of reasons. Most important among those reasons is that bad advice, whether affordable or not, is worse than no advice. And that more "affordable" advice is not generally more affordable...it's simply more difficult to understand what one is actually paying.
So, let me hear it. Why should financial advisors not have to uphold a fiduciary duty? I just don't understand how individuals continue to argue against putting clients' interests first. I want to understand and see the other side. All I see is companies and organizations using the guise of wanting to help and being trustworthy and forthright while fighting against having to do what's right for you in the name of profits.
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