Scott Thomas, ChFC®, CAP®, CKA®, RICP®

True Fiduciary Means What?

I read a great article from Mindy Diamond of Diamond Consultants recently and she seems to really get the bigger picture of "Fiduciary World".  Many in the industry are trying to simply push a clean transparent product and say "I am a fiduciary."

Mindy states there are five key characteristics:

1) "The Ability to Serve Clients Needs First"

2) "A Higher Level of Transparency"

3) "A Clearer Payment Structure"

4) "The Ability to Think and Act Strategically"

5) "Optionality When It Comes to Managing Growth, Continuity and Legacy"

I started in this business May 1, 1986 as an independent advisor representative for an RIA (Registered Investment Advisor) doing fee planning and assets under management model.  My views were grounded in a plan that was first and foremost separate from product sales.  Full disclosure on fees and high level of transparecy are common in RIA firms. Mindy goes on to say that the Broker Dealer firms struggle with these "Fiduciary" keys as it nearly impossible in big firms to accomplish.

Mark Tibergien CEO of Pershing Advisor Solutions says we will see more and more advisors going independent in order to gain more control of culture and lean into the fiduciry model.

Expect to see more industry shake outs of large brokerage firms losing teams of advisors. Amny want to go out and form their own business owner control practices and apply more of these key characteristics. One example of how I have seen this played out with friends of mine with large brokerage firms- Ten years ago I embraced Social Security Planning at deep level and my friends were not allowed to discuss Social Security strategies only when to claim. Another area is veterans benefits for older war time veterans and many of the firms will not allow their people to engage in this activity as well. One last area that many large firms have avoided is proactive tax planning. Not tax advice rather various strategies and what if's with great tools to help clients at least consider alternatives in planning with taxes addressed.

Bottomline is consumers will benefit from more objective advice as this breakaway trend continues.


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