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RIA Leaders 2021: What’s wrong with RIA rankings

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This article originally appeared in Financial Planning by Tobias Salinger

Excerpt from the article:

Clients and industry professionals have the Form ADV at their disposal to tell whether any RIAs have registered reps, and the SEC’s Investor.gov website enables users to see whether advisors are advisers, brokers or both. For advocates like Knut Rostad, president of the Institute for the Fiduciary Standard, the disclosure language itself makes the task of picking out fee-only RIAs from all the others much more difficult.

He points to the new Customer Relationship Summary, Form CRS, that the SEC began requiring under Reg BI last year to decide which firms should make the list. A serious list of RIAs would seek out the terms “fiduciary” or any identifying language about it to create the rankings, Rostad said in an email.

“Required CRS language informs investors that the standard broker-dealers and investment advisers are required to meet is the same,” Rostad said. “This language is grossly misleading. To mitigate this bad language, RIA leaders may choose to report they meet a fiduciary standard and describe what this means on CRS. Real fiduciary leaders will do so.”

Read the full article at FinancialPlanning.com.

Dan Moisand

 

Dan Moisand is a nationally recognized fiduciary fee-only financial planner, an Institute Real Fiduciary™ Advisor and Chair-elect of the CFP Board.

The Institute has enshrined the ‘Moisand Rule’ on fiduciary practices. It is basic and is more important today than ever: “You have to avoid conflicts. If I avoid a conflict, I don’t worry about it.”

Watch the video of Moisand speaking here.

Bob Veres

 

Bob Veres is a long term observer of financial planning. His Newsletter, “Inside information” Is a staple of leading planners. In the May edition he writes about fiduciary and the Institute.

"But a much bigger point is that the fiduciary standard—as Knut Rostad of the Institute for the Fiduciary Standard has pointed out—has been determined by the Supreme Court (1963 ruling) to be at the very heart of the Investment Advisers Act of 1940. It is the foundation of what it means to be an RIA registered with the SEC instead of a tipster or a tout."

- Bob Veres, Parting Thoughts ... The SEC's Own Compliance Culture