Industry Groups Submit New Fiduciary Roadmap to SEC

[David F. Sterling, Esq.]

Re: Fiduciary Assumptions

I continue to be humored by the broad based assumptions regarding the alleged history of CFPs serving their clients' best interests. The CFP curriculum is excellent, but when it comes to financial planning, it has been my experience that the planners fall far short of mastering each curricular item to the point of serving the client's best or any interests.

My research confirms that most who allege to be financial planners are earning their "keep" as asset managers who know very little about "risk management" and the value and application of insurance based solutions. This contributes as much to the "great divide" between fee-based and commission-based advisory solutions as anything else.

What is unfortunate is that since the "fiduciary standard" is not properly "understood" by those most inclined to claim the moral high ground, most of what passes for explanation is merely promotion of their own business platforms. It is also equally apparent that those qualified to appropriately introduce and apply "risk management or insurance based solutions" become easy prey for "guilt by commission."

We have a long way to go before clarity and fairness can be achieved. Let's avoid the inclination to find scapegoats in the absence of rigorous study. Let's avoid the inclination to assume that one's business platform and compensation model is superior to another's. There is enough "ignorance" to go around to be shared and enjoyed by all.

David F. Sterling, Esq., Consultant

[the observer]

"What is unfortunate is that since the "fiduciary standard" is not properly "understood" by those most inclined to claim the moral high ground"

That's probably why two former NAPFA presidents and various other NAPFA miscreants have either been convicted of serious crimes, or, are currently being investigated by the SEC and federal law enforcement.

But the NAPFA legend lives on in their minds!

Meanwhile the so-called "Fahnen Träger" for financial planning, CFP Board, is concentrating on re-regulating investment advisory services already heavily regulated by FINRA an the SEC, instead of promoting the much broader discipline we all pay our dues to have them promote... Oh how silly of me, we pay them licensing fees because we want to use a designation that has no real intrinsic value... BECAUSE CFP Board is concentrating on re-regulating investment advisory services already heavily regulated by FINRA an the SEC!

[Bradly T.]

Financial planners, commissioned brokers and agents, and fiduciaries of managed accounts all and each have conflicts of interest. Those of us wearing two or three or four or more even of these licensing, registrations have overlapping or redundant potential conflicts. I am glad to FINALLY see a more complete discussion of the conflicts of ALL financial service professionals of ALL compensation models.


The RIA fiduciary "standard" is so limited in scope and measurement (it only applies to a singular pocket of client money - it does NOT apply to the client) as to be useless as an "improvement" for all others. Factually, planning is about the prioritization of both cash on hand and future cash flows among or between multiple potential priorities. The new Journal explores, for example, the priority conflict of accelerating mortgage debt off the books and sustaining a mortgage balance to direct and deploy capital into investment. THIS is planning. Prioritization between debt, asset purchase, life style consumption, legacy plans, charitable gifts, gifts to family, cash reserves, risk transfer premiums, AND long term investing. RIAs compensation from AUM is in DIRECT conflict with all 8-12 other priorities for client cash and cash flows....as is commission based compensation. This is a SHARED conflict.



This conflict is not on the agenda by any agency.....sadly, this includes the so-called Noncoalition. Don't know that it should be. But it is indicative of the duplicity, hypocracy, and misdirection in play, still, today. All of retail distribution and advice needs harmonization to modernize and deliver relevancy to a generation that is decades beyond those folks who benefited from the 30s and 40s Acts BOTH....for ALL were wealthy and legally represented and educated back then IF they were clients under EITHER act. Not so today. Democratization of markets and access are way out in front of any and all regulation and compliance efforts....education and licensing too for that matter.



The Noncoalition perserveres in their misguided attempt to forsake cash-flow planning for investment advice/services. They really should read their own materials. They might conclude their's is much grander and far more important discipline that security selection and compensation models for same. For it is so and will always be so...at least to real planners.