Author: Knut A Rostad

Introduction and Summary

Questions of good advice and financial planning are timely. 2016 will initiate the DOL COI Rule era, 76 years after the Advisers Act of 1940, and 47 years since the “birth” of financial planning.  And timeless. The force behind the DOL rule reflects the “shared mission” and question that attracted the financial planning founders in 1969: Can advice replace sales as the industry “driving force”?

2016 is important to the question of “good advice” because regulatory, technological, and market forces remind us why the foundation of good advice must be disinterested advice. Here, I highlight the arguments on fiduciary advice. I then discuss, citing the work of Arthur Laby, a basic (and overlooked) rationale for disinterested advice: common sense. Common sense informs investors’ views of sales and advice, generally, and do so for “good advice” as well.

Read the full Working Paper here.


Tagged with: