I challenge any reader of this article to cite an example where broker-dealers urged brokers to avoid conflicts over disclosing conflicts.
Advising in an intimate relationship of two differs markedly from offering incidental advice in a sales relationship of three. This is what the SEC needs to know to close the gap and create a standard retail investors would reasonably expect.
The CFP Board set out in its proposed standards fiduciary duties for all advice. Its statements are clear and strong. This is an important step. But alone, it falls very short. Why?
Judge Edith Jones argues for the logic and reasonableness in demarcation. Her ruling also argues for the central importance of reforming job titles, reinforcing a clear line between brokers and advisors.
WSJ’s Investigative Report on Discount Brokers: For decades, fee-only fiduciary advisors have said that being compensated only by client fees is better. Advisors are less conflicted, offer more fee transparency and clarity, and this makes for better client advice.
What’s ahead for 2018? There seems to be little basis to believe that the SEC will require financial advisers to act in the best interests of clients by requiring their advice (apart from any accompanying disclosure) to be unaffected by the adviser’s conflicts.