Originally published on ThinkAdvisor.com, January 27, 2014

By Knut Rostad

Tuesday night President Obama delivers his State of the Union speech. Advisors should take note. Not just for the themes the President strikes or economic policies he advances, but for discerning who is listening. For example, will any of your clients tune in, listen and care about what the President has to say?

This is not some abstract civics question; this is a lesson that bears directly on advisors. The President is engulfed in public skepticism. Likewise, fairly or not, investors’ widespread distrust of Wall Street bleeds discredit on all financial services, including advisors.

For advisors who question the direct relevance of Wall Street’s bad behavior and fraudulent deeds, consider the parallels with and public stature of Washington. Then consider the analysis of Wall Street Journal columnist Peggy Noonan, a writer not prone to loud cable TV punditry.

In her Saturday Journal piece, Noonan makes the case that Americans have stopped listening to the President. She cites his recent speech on the National Security Agency when he spoke on this “bitterly contested issue.” She writes, “Pew Research found half of those polled didn’t notice. National Journal’s Dustin Volz wrote that Americans greeted the speech with ‘collective indifference and broad skepticism’. Of the 1 in 10 who followed it, more than 70% doubted his proposals would help protect privacy.”

Noonan says (no surprise here) the “bigger problem” for the President Tuesday night is Obamacare. She recites its widely reported and well-known deficiencies. But then, in zeroing in on what’s important about Obamacare, she takes a different tact compared to the more common establishment or partisan narratives.

She doesn’t talk about a “botched roll out” or website calamities or that no one’s been held accountable, or that “healthy 30 something’s” will sign up, when they get around to it… These points may well be true and part of the Obamacare story, but are they the story?

The mild mannered conservative makes two pointed statements. First, “The program was passed only with the aid of a giant lie. Now everyone knows if you liked your plan, your doctor, your deductible, you can’t keep them.” She then concludes, “When the central domestic fact of your presidency was a fraud, people won’t listen to you anymore.”

Some may suggest Noonan’s words are harsh or partisan. (After all, she’s a former Reagan speechwriter.) She says the President is implicit in “a giant lie” and “a fraud.” Ouch. But is this harsh? How about asking: are her statements true and accurate and important. The record suggests “yes” on all three counts.

Noonan’s analysis is relevant to advisors regarding their own clients as well as potential clients and investors generally. Distrust has consequences. Potential clients—as well as many clients—are too often skeptical or tuned out and turned off when advisors speak.

Advisor Ron Carson’s recent Peak Advisor Conference featured a session where investors reacted to a series of recorded advisor pitches regarding their services and fee structures.As David Armstrong of WealthManagement.com reports, these client-centric pitches failed terribly in connecting effectively with these investors.

Further, Noonan’s candor and honesty may resonate with investors in part because in Washington these traits seem to be in short supply. Consider how the fiduciary issue has been transformed in Washington. Well-established understandings of securities law and industry practices have been turned on their head by aggressive lobbying by the securities and insurance industries.

In this upside-down view (one that many policymakers seem to support), ‘40 Act fiduciary duties would gravely harm brokerage clients. Accordingly, brokers who advise clients while legally obliged to represent manufacturers can best serve investors. Furthermore, they argue that conflicted advice from sales representatives benefits investors and such conflicted advice should not be limited or avoided but encouraged.

Accordingly, in this upside-down view simply advocating that investment advice should be fiduciary advice—that all advisors should represent investors like medical doctors represent patients—just doesn’t cut it in Washington.

Watch the President deliver his State of the Union. Consider how your clients react and look for coverage that has ordinary voters reacting. (Try to avoid most pundits.) There will be an important message here for advisors’regarding moving forward with the fiduciary standard.