Money Mondays; The Fiduciary Standard [AUDIO]
Money Monday on WJON with Steve Laraway this week focused on the "Fiduciary Standard". The proposal being looked at by the Federal government wants to do away with commission for Financial planners. Listen below.
“The Fiduciary Standard”
What is it?
- On its face it is well intended
- Intended to reduce financial advisors from steering clients to “conflicted” products - commissions
- Making sure that clients get their fair share of the returns
- Championing the middle class – making sure suitable products are offered to client
- In effect it would force advisors to go to an hourly fee or fee based method of management.
- Will have a “chilling effect” on advice offered to small clients – many advisors will just not deal with smaller clients (oftentimes they are the ones who need it the most)
- Many smaller clients will be hesitant to pay an hourly fee and advisors will be hesitant to collect it
- Assumes that all Advisors compensated via a commission are putting clients in the wrong investments
- “A solution seeking a problem”
- In the end it will limit advice to smaller clients