Planning or Planning the Portfolio?

[Bradly T.]

Interesting analysis and critique from someone who is not a planner or regrep or retail advisor....but rather, a fund manager and peddler. Interesting and total BS!! My clients come back with more money and more clients year after year after year....despite commissions and trails. We update their cash positions and cash reserves and debt and risk profiles and portfolios and benefits (and grandkids, pets, vacations, etc.). They come back because of my expertise and process and caring, nurturing service. You don't know what the hell you're talking about. You consistantly mock and criticize those who pitch and market to. What a moronic approach and perspective. While some may be as dumb and callous as you claim, they're a damn small minority and do not represent the tens of thousands of us on main street who LIVE among our clients and the communities we serve. What rubbish!!! My clients are NOT losing money....not in annuities, nor in nontraded REITs, nor loaded active funds. Your claims are outlandish and presented without any facts or evidence. Just another salesman, you are, selling your fund.....the all junk or all cash total solution fund for all of everyone's money, no doubt.

[Nick Ray]

Portfolio planning is a very straightforward term: it is just what it says. While there may be a good deal of complexity to this kind of planning, there shouldn't be much confusion as to the term's meaning.

Financial planning is a much more complicated process, and one which very few practitioners actually practice. That's because this kind of planning includes life, disability and all casualty insurance evaluations. Next you should be doing estate tax calculations and working with an estate planning attorney. Long term care planning and funding should be covered. Business continuation and key person coverage; buy and sell agreements and funding are also part of the equation. For very wealthy clients or those who live in more than one state, the plan should have careful consideration for this complexity.
Special needs for children? Charitable planning? Often bill paying and budgeting issues are covered. While there is no one set formula, the fundamental premise is that the breadth and depth of the planning covers all relevant issues.

Portfolio planning is obviously much different that financial planning. Advisors should be very careful how they describe themselves, because a client or prospect may believe they are receiving total financial planning when they are in fact receiving something less.This may lead to legal or compliance problems, but of even greater importance is the fact that a client may believe they have done complete planning - when they have not.

[Bradly T.]

Nick - I've always wondered how a portfolio manager even CAN allocate money among securities, markets, or products without comprehensive planning FIRST?! I wonder if one can actually deliver either expertise or a fiduciary service with a singular focus on the investment side - in retail I mean. Certainly a fund manager is focused by their prospectus and speciality without regard (properly so) to the circumstances and priorities of shareholders - but the allocator/rep/advisor?


I don't begin ANY alllocation structure without knowledge of cash FLOW, debt, risk portfolio, tax obligation and sources, and cash reserves for both understanding circumstances and prioritizing strategic solutions to enhance discretionary cash flow and reduce/manage wealth risks. THEN, and only then, is allocation and selection of securities/funds, etc. come into focus and play. One size fits all, turn key, cookie cutter allocations are all anyone CAN do without planning first. IMO

[BlueHavenCapital]

Should we identify some advisors as portfolio managers, and others as financial planners? Is this a meaningful distinction to consumers? Absolutely we should differentiate between planners and portfolio managers, and yes, it is a meaningful distinction.
We get phone calls from prospects across the country and often they have questions about pension payouts, second and third homes, insurance needs, cash flow, etc. At that point I am quick to recommend that they talk to a planner rather than a portfolio manager like us. In fact, a vast majority of the time I recommend that they talk to a Garrett Planning Network fee-only planner, because I know that person will get exactly what they need: an objective, conflict-free financial plan. I am quick to explain our focus: we are FEE ONLY investment managers focusing mainly on fixed income portfolio management. We don't do financial planning, but we know plenty of people who do. Usually, at that point, the distinction becomes clear to the prospect.
There are many individuals who are bad planners but good executors...and, likewise, there are good planners who just don't like to execute. I think that a clear distinction between skill sets would only help the consumer. In fact, it becomes a transparency issue: Be clear about your skill set and your business focus, and it will only help the consumer make a better decision.

Donald B. Cummings, Jr.
Managing Partner
Blue Haven Capital LLC
www.bluehavencapital.com

[Michael E. Kitces]

We seem to imply that charging clients based on assets (the AUM business model) is a negative because we're 'causing' our clients to be portfolio centric.

But I wonder if we have it backwards. Is it possible that clients just ARE investment centric, and that consequently they choose firms that charge based on AUM (given the dramatic growth in AUM firms over the past decade)?

If AUM is such a misalignment from where clients derive value, why are these firms thriving?

Just some food for thought. More comments up on my own blog about this at:
http://www.kitces.com/blog/archives/136-Does-Charging-AUM-Fees-Cause-Clients-To-Be-More-Investment-Centric.html

Respectfully,
- Michael

Publisher, The Kitces Report, www.kitces.com
Blogger, Nerd's Eye View, www.kitces.com/blog
Twitterer, @MichaelKitces, www.twitter.com/MichaelKitces

[Paul Puckett]

I'd like to echo Michael Kitces comments regarding the possibility that the client is driving the focus on investments, possibly because our industry tends to advertise ability to generate returns and beat indices. In essence, they believe money management is the primary area where they need help from professionals.

In the article, you used a phrase, "colleagues who pay lip service to financial planning, but really all they do is manage assets." "All they do is manage assets" sounds like money management is no big deal. The reverse is equally simplistic, "all they do is plan". People need both planning and management. I don't believe a debate would be helpful to anyone. That said, I do agree that using the term "financial planning", when you don't provide financial planning, to sell money management is completely misleading.

The question you raise is interesting, but I believe our clients would like us to focus on some basic issues first. Regardless of configuration and registration, professionals should demand transparency and full disclosure from their product and service providers. Clearly, they should provide transparency and full disclosure to their clients. With a recent study indicating more than 90% of female investors are seeking honesty from their professionals, this would seem to be the issue. Seeking honesty? Shouldn't honesty be a basic, required, and expected characteristic of anyone handling money?

The services you provide your clients are important, but as an industry we need to re-establish trust. Trust will not be given until all of us commit to those qualities clients already expect.

[Bradly T.]

Please list the tickers for 5 or more OTHER funds - not your own - you own or recommend. You're just pitching man. You stated that "millions of your clients" - referring to regrep clients - "have limited and shrunken capital". Please provide evidence of such a claim....and be sure to leave out the DIYers and the 401k participants....to quantify and verify that reps and advisors are such poor allocators and as indifferent as you claim - loads, commissions, and trails are NOT an incentive for either indifference or "get the money and run". Your low opinion of those of us actually in the profession and actually in retail advice and allocation is revealing and not flattering (of you I mean). And the only fund ever discussed as effective and well managed is your own. You don't see how either and especially both are infuriating??


I do agree with your point (and the other posters) that planning is planning and investing is investing and while investing is a small element to planning, many claim to be planners and provide planning when they are not and do not. Your underlying presumption, though, is always that comp form determines both capability and motivation; you are also very consistant in blaming retail advisor and rep allocators of "losing" money for clients due to a portfolio management style I have NEVER witnessed or been trained to provide. Your statistics are ALWAYS about 401k balances and self-directed investors' results while blaming professionals for their folly and buy high, sell low perpetual cycle.



You're welcome to voice your opinion (although this site is SUPPOSED to be for practitioners - you're NOT one) - but please refrain from hawking your own product and insulting REAL practitioners.



Otherwise, a great discussion about an important issue - who are you/we really and who do our clients think we are?

[Tad Borek]

My soul reason for bringing up this subject is to encourage objective discussion of a successful example of a portfolio which strives to be disciplined and to adapt itself to changing market conditions...Let’s talk.

Please list the tickers for 5 or more OTHER funds - not your own - you own or recommend.

Bradly, I would assume that the high-yield funds held by Bill's mutual fund might be considered "recommended", no? See portfolio holdings snip below from his 12/31/10 Form N-CSR which is of course publicly available at SEC.gov. Full filing here. There was also about half in cash with $30M in trades still settling.

Perhaps Mr.D can elaborate on his methodology for choosing high-yield funds - why the list below? Why are you better at it than we are? I'm especially interested in learning how he was able to identify funds that can deal with the large inflows/outflows that seem to be required of a portfolio manager who does high-yield-to-cash timing strategies using open-ended mutual funds and ETFs. High-yield is notoriously hard to trade, no? It seems you would be a less than desirable shareholder from the perspective of the fund or, more to the point, its other shareholders. Then again...(cough) well, never mind - but remember some of the fund family names involved in prior "market timing" incidents that turned that phrase into a dirty word for other reasons.

While we're in "let's talk" mode about portfolio management: Bill any comment on GO BABs yielding more than the high-yield index, even with the 35% federal interest subsidy? It's history now but it was there for awhile. Was it a mispricing, or is high-yield really less risky? Why?

-Tad

MUTUAL FUNDS - 54.0 %
			DEBT FUNDS - 54.0 %
	1,815,439		American High-Income Trust						$ 20,460,000
	2,207,342		Columbia High Yield Bond Fund						6,136,411
	1,274,496		DWS High Income Fund						6,143,070
	549,046		Hartford High Yield Fund						4,062,943
	739,578		Ivy High Income Fund						6,138,494
	523,688		Lord Abbett High Yield Fund						4,090,000
	1,183,827		MFS High Income Fund						4,096,041
	574,906		Metropolitan West High Yield Bond Fund						6,140,000
	973,506		Northeast Investors Trust						6,006,534
	596,361		Pioneer High Yield Fund						6,059,026
	1,325,112		Putnam High Yield Trust						10,123,854
	2,045,071		RidgeWorth SEIX High Yield Bonnd Fund						20,103,043
	540,979		SEI High Yield Bond Fund						3,992,422
	983,125		Wells Fargo Advantage High Yield Bond Fund						3,067,350
	468,640		Western Asset High Yield Portfolio						4,081,855
			TOTAL MUTUAL FUNDS ( Cost - $110,577,169)					110,701,042
			EXCHANGE TRADED FUNDS - 12.8%
			DEBT FUNDS - 12.8%
	147,303		iShares iBoxx $ High Yield Corporate Bond Fund						13,299,988
	328,190		SPDR Barclays Capital High Yield Bond ETF						13,032,425
			TOTAL EXCHANGE TRADED FUNDS ( Cost - $26,397,543)				26,332,413

[Bradly T.]

I guess he just can't help himself.

[Tad Borek]

Our desire in choosing junk bond funds in which to invest has been based on simple standards (1) our clients are extended institutional load-waived status, (2) we can sell without redemption restrictions or charges on agreed-upon advanced notice and (3) we can reinvest at will with agreed-upon notice and no other restrictions.

Which nicely wraps this thread back to the original point. I just learned something that will be helpful in my role as B-S-ometer to my clients - a role no third-party portfolio manager ever will fill.

Isn't it interesting that the junk-bond mutual funds listed in this EDGAR filing will accept lumps of cash from a market timer in the asset class? Does anyone have clients invested in these junk-bond funds? Does that concern you, as the manager of an individual retail investor's money...an investor who may bear the externalized costs imposed by hot money moving in and out of the fund?

It might be a non-issue but anyone who has access to a bond trading platform can look and see the liquidity of individual junk bonds. You can pull up the top holdings of these funds and see what the market impact might be of large inflows/outflows. Yes, by doing a holding by holding analysis. Where's Stephen Winks when you need him?

Thankfully...I don't use any of these, but if I did I'd be calling my wholesaler and asking some questions.

Still curious about your take on BABs, Bill...isn't it interesting that S&P didn't put all of them on credit watch negative when they put Treasury debt on credit watch negative? How is the BAB 35% subsidy any different? An interesting topic for planning out an income stream for a client portfolio, no?

Nothing in this post is meant as a recommendation in favor of, or against, any security; discussion purposes only. This is a discussion board right?

-Tad

[Bradly T.]

One of a professional's most critical roles - BS-ometer!!! Indeed, while my clients appreciate what I do for them, they have no idea how valuable I am by what I DON'T, WON'T, AND HAVE NEVER done TO them. Due dilligence, expertise, and professional ethics/process provide far more protection than opportunity when weighed relatively. Often, it's what is NOT done that delivers more value. Flavor of the month, hot picks, new products to avoid the past cycle, tax dodges, et al, are constantly foisted on the inexperienced - selling solutions by and to our fears. Bill - you've got the BS Meter about to blow up!!

[BobVeres]

Good grief...

Bob Veres

[IQFINSVCS]

By Postulating differences between financial planning and portfolio management, Mr. Veres is presenting false choices and attempting to dice any percieved differences too finely. I cannot comprehend how anyone who seriously manages money for individual clients can do so without first completing, or reviewing a completed comprehensive financial analysis that includes the six areas of financial planning required by the Certified Planner Board of Standards.

I require each of my clients to complete a comprehensive analysis for which I charge a fixed fee. I am also an asset manager - I am also compensated via fee-based AUM- as my expertise also includes prior experience as a sell-side equity analyst. I have been in the financial planning business since 1986 and have retained 95.0% of my original clients, including children of clients for whom I had established college education plans at birth and subsequently seen through college, and many clients who are now comfortably retired.

I can say without equivocation or prevarication that not one of my clients lost money during the recent 2008 financial meltdown or during their entire history with my firm. I do not ask for referals, I do no marketing, I do no community outreach. All of my new clients come to me from unsolicited referals from my existing clients. I love my clients; they are my friends and based on my income, I can safely say that they appreciate my services.

I believe that I am one of the luckiest SOB's on the earth as I am a very happy and healthy individual with a great big and loving family, including three beautiful grand daughters. I owe all of this to the financial planning industry, my trusting clients, and most importantly, to my gifts as a portfolio manager.

What matters most are the following: honesty, sincerity, full disclosure, a desire to help others, being prepared to help others by educating yourself and staying up-to-date- in your chosen field, giving of yourself and time to people who truly need your help, even if they cannot afford your services. If you are true to yourself and others you will be highly rewarded financially, spiritually and with a successul financial planning/money management career.

[Bradly T.]

Thank you IQ....what a wonderful articulation of professionalism!! (for any practitioner of any profession) This thread is totally jumbled now that all posts of solicitation by the investfundguru have been properly removed...but your post may reinvigorate an important discussion. I agree that Bob V. seems to be quite confused himself about what planning is and the immense difference between planning and portfolio allocation/management. He and the noncoalition have spent a great deal of time and energy blurring the immense gulf between the two. To plan without portfolio management provides a significant benefit to the client - to invest without planning cannot be of ANY benefit whatsoever to the client. Now, there are still many reps and advisors today that are very proficient at their narrow task of managing a pocket of dollars in a very specific way for the benefit of their client's portfolio. But one must ask - do they manage money that should be directed to debt acceleration, risk transfer premiums, charity or family gifts, cash reserves, etc.? How would they know without planning FIRST? ... and portfolio allocations and management second to actually properly budget and allocate the pocket under management?? Filling out a stupid questionaire measuring the current emotional "risk tolerance" and getting an allocation agreement signed is hardly comprehensive anything....and I cannot believe that satisfies any definition of fiduciary!! (Now, I know many advisors do far better at knowing the client than others, but it is a fact that the so-callled fiduciary standard does NOT require more than that - planning prior to accepting money under management is not a requirement.....should it be?)


If I will not invest money as a reg rep, getting paid by commission even, without comprehensive planning first....who is providing service actually in the client's best interest? Me or the fiduciary with the questionaire and allocation agreement who does not do planning first? Ethics and expertise have never been defined by form of compensation and a client's best interest is never served by a lack of planning and analysis prior to portfolio management. You either ARE a planner or you're NOT...you either apply the discipline on behalf of clients or you are merely SELLING something you are not delivering. Woe be unto you who claim fiduciary standing and advertise planning but do not deliver it. I beleive that would fall under "conflict of interest".......perhaps fraud is the more accurate term - but certainly not in anyone's best interest.



While M. Kitces and Paul raise an interesting question - one can hardly ALLOW the uninformed and misinformed client to direct ANYTHING, especially the management and protection of wealth. So what if the client begins the focus and priority around portfolios - what professional goes along with client-driven agendas?? One must acknowledge and address client delivered issues....in due time and due priority. Relying on clients to drive a professional process is the total abandonment OF the professional process!! It is not difficult to redirect inanity (like portfolio performance for example) toward reality and true prioritization of issues for review, analysis, consideration, and strategic action. If our process is determined by a focus on portfolio - whether driven by advisor or client - we merely acknowledge we do not have any clue ourselves as to the importance, value, or benefit of our own services or expertise. You simply cannot create, protect, distribute, or transfer wealth by portfolio management. Period.

[Stephen Winks]

I agree with Bob Veres, "good grief"


There is a significant difference between planning and advisory services entailing fiduciary standing--two distinctly different considerations and disciplines. There is no statutory reguirement to establish a sinking fund for a boat, childrens education or retirement, all of which are client needs which can be planned for, but in no way necessarly constitute fiduciary standing, it all depends on how the adviser executes advisory services. Bradley T can not discern the difference.



Bradley T's holier than thou observations belie his primative understand of fiduciary duty.



If he were candid and honest, there are several very basic questions which would clearly establish the best interests of his clients are not his first and foremost consideration, such as:

1. How do you treat trade execution cost? As a cost center to be minimized in the best interest of the consumer required for fiduciary standing, or is it treated as a profit center for your broker/dealer?

2. Do you use terribly expensive packaged products with an average cost of 130 basis points not including trade execution cost of as much as an additional 100 basis points when top RIAs charge 50 bps all inclusive including investment cost, trade execution and adviser compensation. remember a significant fiduciary duty is managing cost on behalf of the client in the client's best interest.

3. How do you provide your client continuous comprehensive counsel requiring real time holdings data necessary for fiduciary standing? This sort of information is not possible in mutual funds.

4. If not, how do you perform an asset/liability study on all client holdings necessary for it to even be possible for you to determine whether your recommendations are improving overall portfolio returns, reducing risk or enhancing the tax efficiency, liquidity, cost structure, etc of the cliennt's holdings as a whole?

5. Are you using conjoint reasoning and utility theory to construct a custom benchmark against which you are managing each custom client portfolio? Why not.

6. How do you know whether managers have skill or are lucky? I bet you are buying the hot dot.

7. etc, etc, etc.



There are a series of best practices not remotely within the reach of Bradley T that require advanced prudent processes and technology, conflict of interest management, work flow management tied to a functional division of labor that take advice/fiduciary standing beyond the human ability to process information. Ignorance is bliss for Bradley T.



My experience with Bradley T is he is all talk and no substance, disparraging everyone as a lesser being, when he is not even remotely familiar with the concepts of an asset/liability study or investment policy essential for fiduciary standing required by statute and routinely provided and accepted in the institutional markets.



As Bob Veres says, "good grief."



SCW

[Bradly T.]

OUCH!! This is no forum for responding to character assasination or the defense of my multiple personality disorders and you are entitled to your opinion. But it brings me great comfort, thank you, to be on the opposite side of most issues with you Mr. Winks. You, your good friend Bob V., and your cohorts in the noncoalition have consistantly shown an uncanny ability to ignore the issues at hand, use half truths to hide your falsehoods, applied inuendo and insinuation to demean critics rather than reasonably debate issues or articulate logical arguements for your positions. I do agree with you that I am a primitive....much like those described and applauded by Nick Murray......unswayed by volatility or "new" ways to manage wealth....or hot dots, momentum, fear, prediction, etc. I have never aspired to be one of your "top" RIAs or a top wirehouse stock jock either.


Your post is very relevant to the thread's primary question and well demostrates the opinion you share with Mr. V and his noncoalition compatriots about the value and purpose of planning. You claim they are distinctly different and yet persist to measure everyone's value to their clients by their portfolio management model, condemning all who use mutual funds, or annuities, or nontraded REITs, or CV life insurance, or any other financial product other than direct custodial investments in indexes or individual securities, maintaining a vigilent finger on the trading trigger, minute by minute. You persist in claiming that ERISA and institutional asset management is the only appropriate methodology for us retailers but you never explain how this is possible.



For example - what of my clients with small balance educational funds for individual grandchildren? What of my young families adding $100 month to their Roth IRAs? What do I do with my 100 or so account registrations with less than $30k in them? How do I make money @ 50 BPs with a $50k account even.....that's $250 to me annually less MY trading costs and RIA annual account charges (about $250 thank you). What you propose would require me to shun my very client base and join the thundering herd of millionaire chasers. It is exclusionary and elitist and eliminates about 80% of available financial products for clients. You presume cost is more important than access and more importantly, that cost trumps performance value or service relationship without any recognition that planning is all about risk.....multiple forms of risk to client wealth, that your model doesn't address or even acknowledge.



I do have a few millionaires (self made business folks mostly) and I do use managed accounts for a pocket of their money, I am not anti-RIA. I just think it is both unavailable and inappropriate in many situations. Based on your presentation of fiduciary the past 2 years, I have come to believe it is, by far, the most inferior of all possible models and ignores the far more important issues to the working class of access, choice, affordability, and us main street advisors who help them with comprehensive planning and wide spectrum strategic solutions. My clients need a planner, not a securities monitor, and have profited over the decades by my allocation structures and fund manager selection process to steward their investments while I steward their risk and manage their behavior.



It has always been my intention (yeah I know the road to hell is paved with good ones grandma) to defend the planning discipline and distinguish it on its own merits, and to champion diversity, access, choice, and solutions for the working class - not to disparage any other actual practitioners in the planning or investment business. I may be a little short with those who criticize my model, those who claim to know "the" way, those who accuse me or others of any lack of ethics or expertise based on the individual's model, and those who lie or use elements of arguement that are disingenous or downright illogical. But I hardly beleive I'm better than others....even you Winks. I'm just me and I don't want you telling me what's wrong with me and telling those in power how best to fix me and tell me what I should do. I don't want to be a millionaire chasing, finger on the trading button, eye on the screen dweeb you insist I become. I'm a planner first and I happen to also invest client money in ways I beleive to be in their best interest. But do carry on.......



The best arguement for my side is you, and Mr. V., and the noncoalition's presentations to date on this very issue.

[Stephen Winks]

Bradley T,


Responsible firms are taking heed of the new fiduciary requirements for brokers.



SCW

[Lucullus]

I see that Mr. Winks is still condemning every advisor who does not operate as a portfolio manager, despite the fact that many planning engagements do not require (and may not even permit) the advisor to act in that capacity.

Well, there is at least one virtue in that mindset. It's simple. You begin by declaring that the only assumptions with any merit are yours. All other assumptions are wrong. You then demonstrate that behavior that contradicts, or is inconsistent with, your assumptions is wrong by definition. And you demand that those who hold wrong beliefs and/or engage in wrong behavior cease, and adopt your assumptions (and behave with your approval)". For best results, accept no substitute. And repeat as needed.

He's not alone in his use of this technique. It's been very popular throughout history. And it's especially appealing to those who extend it to include the issuance of Fatwahs.

[Stephen Winks]

Lucullus,


Every adviser who picks or recommends an investment is held to the fiduciary standard of care with which you so disagree. This is not a matter of opinion--it's fact.



Though as an insurance agent you feel no responsibility to be accountable for every policy you have ever sold, as an adviser you are responsible for every recommendation you have ever made and every asset and liability you monitor on behalf of the client in the client's best interest. Thus you fulfill your ongoing fiduciary duty of care (the fiduciary standard) and loyalty (conflicts of interest management) to your clients. This means if you are a fiduciary acting in your client's best interest--you are acting as a portfolio manager.



I realize this is new to you, but in essence to act in a fiduciary capacity there are new fiduciary duties required which require advanced prudent processes, technology, a functional division of labor and conflict of interest management in order for advice to be safe, scalable and easy to execute.



You have not agreed with any of this over the past two years and I don't expect you to--but at least one major global financial services firm will be making expert advice safe, scalable and easy to execute with an audit path to prove it in July at a cost far lower than the average mutual fund.



I hope for the sake of your clients, you might go beyond your "earth is flat" thinking and consider the best interestrs of your clients.



SCW

[Bradly T.]

Trustees, POAs, CPAs, CFPs, and many other fiduciaries will be interested to find out they are not and cannot be fiduciaries since they don't manage portfolios. One of your most blatant falsehoods. One cannot, despite the intent and capability to act in any clients' best interest unless they are a fiduciary investment advisor with custody, discretion, and active trading in an account devoid of mutual funds or any financial product that pays any commission. But one can act (actually must and automatically will) in a client's best interest as an RIA fiduciary without any knowledge of or obligation to know the financial details of the client situation, by simply acquiring an allocation agreement. And you cannot discern the gross illogic you display? THEN you say that the new standard will deliver your vision of universal obligation and business model.....which it clearly will NOT. The "new" standard, when it is finally defined and applied (your clairvoyance is impressive since you seem to be the only one on the planet who already knows the details of this undetermined standard - but which must allow mutual funds, non-custodial services, and commissionable products). So, on one hand you narrowly declare what one must and must not do to meet the fiduciary standard and then you endorse that standard (yet to come) which clearly does NOT come close to your definitions. You claim one cannot be a fiduciary in the agency, BD, or dual indie or IAR worlds.....and then you say we are....or is it will be.....simply by a new rule which says we are! But you don't seem to understand that the DEFINITION is changing and not those practices which will prosper and be covered under the new definition.


So us primitives will be magically cleansed and our practices purified by the simple inclusion under the new definition of fiduciary? So it really is the very word itself that delivers the ethics and expertise to act in the clients' interest. A fascinating display of unreasoning illogic and inconsistancy. But still no defense of abandoning 75%+ of households and practitioners from the financial product and service industry. Your and Veres' "let them eat cake" message is consistant and embarrasingly elitist....and neither of you even pretend to offer, or care if there is any alternative to those folks.

[Lucullus]

Mr. Winks' notion of "fact" is right up there with Donald Trump's. A "fact" is something he chooses to believe, and nothing that he does not choose to believe can possibly be a "fact".

The FACTS are:

Neither Dodd-Frank, nor the DOL, nor the SEC have, thus far, imposed ANY fiduciary standard upon an insurance agent who is neither registered to sell securities nor gives advice regarding them. To be sure, Dodd-Frank has empowered the SEC to prescribe a standard of care that is at least as rigorous as that applying to investment advisors and impose same on "brokers" (translation: registered representatives), but nothing in that legislation imposes ANY fiduciary standard on non-registered insurance agents. If Mr. Winks believes otherwise, he is free to provide citations - actual EVIDENCE - to support his belief.

That said, MANY insurance agents (myself included) have voluntarily assumed fiduciary status by joining organizations the canons of which declare that we members are fiduciaries or by obtaining and using credentials that imply or denote fiduciary duty (e.g.: the FPA, Society of FSP, CFP(R) and ChFC(R) designations).

That said, the fiduciary duty that attaches by such affiliation or acquisition is NOT what Mr. Winks believes is "the" fiduciary standard. We have the duty of ongoing care only when it is clearly an element of the advisory relationship and the duty of custodianship of clients' assets only when we agree to such custody. Many advisors work for clients for whom they do not have either custody of assets or discretionary trading authority.

We must put the customers' interest first;

We must disclose any unavoidable conflicts of interest (including compensation);

We must be competent and knowledgable and act prudently;

We must hold the clients' information in confidence.

These are all indispensible elements of ANY fiduciary duty. And I have not seen ANYONE here object that those of us who bear fiduciary duty are obliged to meet these strictures.

But if we are not portfolio managers, hired on an ongoing basis, with express discretionary trading authority, and having custody of client assets, we do NOT bear the responsibilities and duties that apply ONLY to those who are.

Mr. Winks has consistently declared the opposite. This might be because he cannot distinguish between those who manage portfolios and those who don't, with the result that he sees everyone as a portfolio manager. It might be because his firm offers support services (at a fee, of course) to those who manage portfolios, and it would be to his financial advantage for the government to mandate that everyone be a potential customer. Or he may know better now, but be unwilling to admit that his earlier proclamations were sheer nonsense.

I don't know which is the case, and I really don't care, because it doesn't matter. What DOES matter is accuracy. The facts. Truth!

We can and should debate how to reconcile or eliminate the contradictions in standards of care that now exist. We can and should consider the implications, on advisors, on consumers, on our economy, of the rules that we will eventually decide to impose. If we want to arrive at rules that make sense, even when they amount to a massive change in the way things are done, we're going to have to work very hard. (I am saying that WE will arrive at rules because I believe that We The People are the source of those rules. Congress and Federal agencies are not other parties, adverse to us; they're OUR agents).

But none of that requires - or will even tolerate - that we ignore evidence that we don't like or declare our mere wishes to be fact.

- John L. Olsen, CLU, ChFC, AEP

[Stephen Winks]

Lucullus aka John Olsen,


Are you really waiting for someone to tell you to act in your client's best interest?



Pitiful, how do you explain to your clients what you were doing before?



SCW

[Lucullus]

Mr. Winks, you embarrass yourself - yet again. Did you actually READ my last posting before you replied to it?

I doubt that anyone on this forum needs someone to tell him or her to put the client's interest first. As many of us have stated, repeatedly, we do that already. But if anyone here actually does require such counsel, do you suppose that he or she would seek it from someone who has demonstrated, over and over again, not only appalling ignorance of how standards of care REALLY work, but a persistent refusal to cure that condition?

You are free to continue proclaiming that the only possible version of a Fiduciary Standard is one that requires the fiduciary to manage investment portfolios on a continuing basis, have custody of client assets, and discretionary trading authority. Just as those of us who ARE fiduciaries, but who do NOT work in that fashion (and, thus, are NOT subject to that version of Fiduciary duty) are free to view those proclamations with the amused contempt that they deserve.

[Bradly T.]

Yes Mr. Winks, you will be surprised how little how many of us will need to change anything since we have long managed very client centric practices as planners and prudent process managers in our clients' best interests. Perhaps you would allow those of us who actually ARE planners and advisors and reps and agents (that's right, many of us are licensed and registered and credentialed by multiple agencies, boards, etc.) to continue the conversation about the difference between planning and portfolio management, the importance of planning TO portfolio management (for retail distributors and advisors), and the abuse by some practitioners of claiming to provide planning while only applying the discipline very narrowly (if at all) to portfolios only. Since you are NOT a planner, or retail rep, or advisor, or portfolio manager OF ANY KIND OR DESCRIPTION, perhaps you could display the good taste to either hold your tongue or at least GET ON POINT!

[Stephen Winks]

Lucullus,


If you were a fiduciary you would be receive an ongoing fiduciary duty of care (expert fiduciary standard) and loyalty (management of conflict of interest, not disclosure that just perpetuates conflicts), do you diasgree? If not, what is your point, you are not actingin a fiduciary capacity?



SCW

[Bradly T.]

Guess not......John - back to Coventry again??

[Lucullus]

Bradley,

Sending him to Coventry won't work unless everyone agrees. And it may not work even then. Clearly, this guy isn't phased by repeated repudiations of his nonsense. Indeed, he not only does not credit evidence (however clearly factual) that contradicts his notions; he doesn't seem even to notice it. I mean, look at this last posting addressed to me. He repeats the mantra that he's been spouting all along (one that I, yourself, and others here have revealed, repeatedly, to be sheer nonsense) and then asks me if I agree with it! This, in direct response to a posting of mine in which I denounced it for the bunkum it is.

Did the sheer absurdity of that never cross his mind?

It's like trying to engage in serious debate with a "Holocaust denier". Facts don't matter to these people. Logic doesn't matter. They know what they know and no evidence to the contrary will be considered. Their "logic" consists of a repetition of hypotheses as though they've been proven. As in "If you were a fiduciary you would be receive an ongoing fiduciary duty of care (expert fiduciary standard) and loyalty (management of conflict of interest, not disclosure that just perpetuates conflicts), do you diasgree?"

Translated into comprehensible English, that appears to be announcement that he's concluded to be true an assertion which he initially introduced as an axiom (but which was refuted by myself, yourself, and just about everyone who knows anything about fiduciary duty). He ignores the refutation, repeats the refuted assertion as fact, and then asks for agreement that it's true.


It was beyond the capability of humans of that time to have built the pyramids at Giza, so somebody else had to have done it.

No other race on earth existed with that capability, so it had to be creatures not of this earth.

The only possible candidates are Aliens. Aliens built those pyramids.

You cannot prove they didn't, can you?

So, having been shown that aliens constructed the pyramids in Egypt, how can you dispute that they also built the ones in Central America?

People who think like this often call into the late night radio show of my friend, George Noory. They're LOTS of fun to listen to.... when they're just calling into a radio show.

They're much less amusing when they're trying to inject their muddled notions into a serious professional discussion.

- John

[Stephen Winks]

Bradley T and John Olsen,


It still doesn't occur to you two that your role and responsibilities totally change under a fiduciary standard that actually entails specific fiduciary duties currently not supporterd by the brokerage business model.



I really don't care whether you get it or not, it is up to you to figure it out. You folks still maintain the earth is flat which is ok until your clients are informed by more reasponsible advisers that it is round and can prove it based on statute, case law and regulatory opinion letters. You are assuming massive liability by maintaining you are fiduciaries without providing the necessary services required for fiduciary standing.



Ron Carson, LPL's largest adviser ($3 billion), just made it clear to LPL that broker support for advisory services is totally inadequate for fiduciary standing--an obvious truth. You guys see no difference and are setting up yourselves to be blind sided by those actually providing fiduciary counsel. How you run you business is totally up to you. But I think your repudiation of enabling prudent processes authenticated by statutory documentation, advanced technology necessary for fiduciary standing, functional division of labor that makes advice scalable and easy to execute, conflict of interest management that makes fiduciary standing possible, all of which makes advice safe, scalable and easy to execute--makes you extremely vulnerable to fiduciaries who have access to those enabling resources. So far your battling average in acting in your client's best interest is a goose egg and you are not willing to even entertain that brokers are not acting in a fiduciary capacity when the industry itself has readily acknowledged it.



Now do you understand why any informed person would care to know what you think?



SCW

[Lucullus]

Mr. Winks,

I believe that both Bradley and I understand why any informed person might care what we think. But that hardly describes you. You've determined that your perception of the standards of care issues is the only acceptable one and you're not going to listen to any evidence that calls it into question - much less evidence that proves it to be nonsense. You are not merely ignorant of the subject about which you rant; you're willfully so. You lack both understanding and the willingness to acquire it.

Dodd-Frank does not support your narrow minded viewpoint; neither do current SEC rules. Indeed, Sect. 913g specifically negates it. Anyone with the ability to read that Section objectively and the will to do so will recognize that. That you do not is your problem, sir, not mine, Bradley's, or anyone else's.

You are free to insist that everyone who gives financial advice must act as a portfolio manager with ongoing duty, custodial responsibility, and discretionary authority must. Just as those who believe that the earth is flat are free to insist that it is to everyone who has not yet gotten out of earshot.

But the earth isn't flat, and almost everyone on this non-flat planet knows it. And your delusional notions of fiduciary duty are not binding on the non-deluded. Financial planners who don't have custody or discretionary authority - and, perhaps, not ongoing duty (because their engagements with their clients do not require it) - will continue to act in accordance with the duty that they legitimately owe, not with the duty that your befuddled mind would have them observe.

That you disapprove of that may annoy some of us, in the same sense that we're annoyed by the persistent bleating of "birthers", but it's hardly a matter of concern.

Frankly, I am glad that you're pursuing this silly crusade. I teach classes in financial planning and ethics, and your proclamations provide me with fine illustrations for the students, of how the rules do not work, not to mention some often-needed comedic relief.

On the off-chance that you might actually want to learn something about how fiduciary duty and the suitability standards actually do work, you might ask a member of the Society of Financial Service Professionals to let you sit in on the May 18th national video teleconference on that subject. Dick Weber, Ben Baldwin, and I are panelists in that presentation, and we'll be talking about these issues and how they may affect those who actually DO work in the financial services industry.

- John Olsen

[Lucullus]

"But I think your repudiation of enabling prudent processes authenticated by statutory documentation, advanced technology necessary for fiduciary standing, functional division of labor that makes advice scalable and easy to execute, conflict of interest management that makes fiduciary standing possible, all of which makes advice safe, scalable and easy to execute--makes you extremely vulnerable to fiduciaries who have access to those enabling resources."

Translation into English: "You won't buy my sales pitch (for my firm, which provides some sort of "documentation" and "advanced technology" to those portfolio managers who have been convinced by that pitch that they require it), and I don't like that, so you're gonna be sorry!"

[Stephen Winks]

Bradley T and John Olsen aka Lucullus,


Best of luck to you in fulfilling your fiduciary duties, which to this day you question, even though you are very willing to acknowledge fiduciary status, not knowing what it is.



There has never been a pitch or product entailed in these discussions, only the question of fiduciary standing and how the industry can make advice safe, scalable and easy to execute for brokers. Help you certainly do not see a need for or will not acknowledge yet essential for large scale institutionalized support for fiduciary standing.



There is a much higher level of counsel comming down the path that outdates the advice products you sell, provides a far higher level of counsel at a lower cost, authenticates expert fiduciary standing which better compensates the adviser. Please stick to what you are doing, when necessity requires you to adapt, only then will you have an open mind to modernity.



SCW

[Lucullus]

Have a nice day, Mr. Winks. I have to go teach a class...

...to people with open minds.

They're not only smart, but they can write comprehensible English.

Quite unlike the author of "Help you certainly do not see a need for or will not acknowledge yet essential for large scale institutionalized support for fiduciary standing."

Do you even READ the stuff you post before posting it? :)

[Stephen Winks]

Bradley T and John Olsen.


Is there anything constructive you can add to the discussion of fiduciary standing and how we make advice safe, scalable and easy to execute?



If not, I am not willing to continue to beat this dead horse any further.



You don't think you have an ongoing fiduciary duty of care (expert fiduciary standard) and loyalty (conflict of interest management, not disclosure which perpetuates conflicts)to your clients but say you are a fiduciary. A ridiculous assertion. You are by definition a broker not an adviser--which is the crux of our disagreement. There is nothing wrong in being a broker, you just insist on being misleading. Until you can back up your assertion by statute, which is not possible, you might focus your efforts on selling insurance rather than pretending to provide advisory services in the form of a product you sell.



As for my advisory services credentials, I would advise you not to compare either your credentials, patents held, research published, the depth and breath of counsel provided by market segment, the technology used, portfolio construction and management resources engaged or investment results generated to those I advise.



SCW


PS: Lord help those minds you are filling with insurance centric advisory services totally inconsistent with any statutory concept of fiduciary standing. As for my literary skill, the sentence you cite makes perfect sense if you read "help" as a noun as it is intended, a device in common use in literary circles for well over a century, if you are well read.

[Stephen Winks]

Lucullus,


If you base your assertion on 913g, you loose. Explain yourself.



SCW

[Bradly T.]

The scarlet letter finally comes out!! John, it is the Lord who "is filling our minds" with lies and falsehoods but now that Winks has asked her to stop, he/she surely will!! I feel smarter already! And far more client centric certainly. Guess it worked. Don't know why we waste so much time on debating issues and forming regulations when we could simply agree with the incomprehensible illogic of one so qualified (and so connected :)!! Next......global warming? World peace? Male pattern baldness perhaps? The end of another, for awhile, interesting thread.

[Stephen Winks]

Bradley T,


As they say, once you open your mouth, it leaves no doubt.



You couldn't be any less credible.



SCW

[Lucullus]

Bradley,

Gosh, you must feel awful, learning that you're not considered credible by Mr. Winks. I know that his disapproval of me, and his rejection of my positions, has wrecked my self-confidence every bit as much as when a fellow explained to me that I'm a naive dupe of The Establishment because I believe that the moon landings actually occurred.

Seriously, my friend, I have found Mr. Winks' expressed opposition to me literally upsetting. I made the mistake of reading his last posting while I was drinking a soda. Cleaning the keyboard was a real pain.

And I'm reasonably confident that there's no point in trying to point out grammatical errors to someone to whom I'd have to explain that a subordinate clause is not one of Santa's helpers.


- John

[Stephen Winks]

John Olsen,


There you go again.



If you can't win on substance you disparage.



Are you afraid to discuss your 913 G claim that magically absolves everyone from fiduciary responsibility?



SCW

[Bradly T.]

Mr. Winks, while there seems no end to the multitude of issues on which you appear clueless and demonstrate a persistant inability to apply even fundamental and lineal logic (forget about abstract conceptualization) or any consistancy to your positions, one thing should be very apparent to even you - the definition of fiduciary is changing by new regs under DF and by the SEC. Now your singular definition is not really faulty, it merely ignores all the other fiduciary standards in-force today (and with long historical records to demonstrate this FACT) and relies solely on the specific, institutional ERISA standard - only one of 8-10 I can think of. Not only is your standard not in-force now for RIAs (even the "top" ones), but the harmonization under DF will reduce the standard that is applied today significantly to embrace rules, disclosures, funds, other third party managers, commissions, and proprietary product distribution. This diminuation of the in-force standard to provide the harmonization and reduce consumer "confusion" will NOT end or even basically change the multitude of practices currently under two standards.


I have come to believe we should live in a 3 standard world - not one or two. There is still a place for wirehouse stock jocks and traders (it's not my place but it would not be hard to present evidence supporting the model's efficacy for a class of investor and a pocket of money for the well heeled) and certainly, there is a place for those with custody, discretion, and the creation of statements (for even the wealthier private banking and family wealth managment clientele). But neither of those institutionalized and historic models has anything in common with the far greater number of retail reps and advisors whose primary role is knowing the client, managing their multitudinous and smaller balance accounts, planning for the many inter-related but non-portfolio issues faced by client families, and managing cash flow and asset distributions for decades. RIAs, indie BDs, and dual hybrids ALL practice within THIS environment - a noninstitutional environment wherein allocation structure and fund/manager selection and reporting, reviewing, rebalancing, etc. are their focus and tools. In our world, it is NOT imperative (or even important - nay, not even relevant) to know precisely and minute by minute what individual securities are owned at any specific time.

[Lucullus]

Bradley,

It appears that Mr. Winks' consistent refusal to acknowledge facts is based, not so much in intransigence as in a basic incapacity to distinguish facts from what he wishes to believe, as evidenced by his boneheaded persistence in ignoring the FACT that Sect. 913g of Dodd-Frank amends the Securities and Exchange Act of 1934 by inserting in it Sect. m(1) which includes the following language: "nothing in this section shall require a broker or dealer or registered representative to have a continuing duty of care or loyalty to the consumer after providing personalized advice about securities".

But as he has declared that continuing duty is an indispensible element of fiduciary duty and that we advisors are bound to fiduciary by law, and as Dodd-Frank and the 1934 Act are Federal law, Mr. Winks simply pretends that those words aren't there (an argumentative tactic most people stop using by the time they reach puberty).

Having told us that we are fiduciaries but that we refuse the status (which was, and is, flatly false), he now says that we aren't fiduciaries because we don't have custody of client assets, discretionary authority, or some other responsibility that he declares, with ZERO authority, to be something ALL fiduciaries must bear. No one who actually understands what fiduciaries actually do in the real world harbors those same delusions, but Mr. Winks trumpets them as fact, all the same. See http://www.thefiduciarystandard.org/, where the Committee for Fiduciary Standards lists five core principles of fiduciary duty. Mr. Winks parochial and self-serving fantasies are not among them.

It's gone beyond pathetic, and even beyond comedic. It's just silly.

You cannot educate the ineducable or open a mind that is welded shut from the inside.

- John

[Stephen Winks]

Thank you Bradley T and John Olsen.


I have been waiting for this.



Bradley are you familiar with the phrase "statutory requirements"? This means the SEC, DOL, ect.



Collectively, this information has been consolidated in the Foundation for Fiduciary Studies definitive fiduciary standards of care. Thus there is an unimpeachable universal understanding of fiduciary duty specifically citing statute, case law and regulastory opinion letters. Further a group of 50 industry experts organized by me has defined best practices as well as the prudent processes and technology necessary to make advice safe, scalable and easy to execute. This group is comprised of the leading advisers and technical experts in the industry and does not advance the seat of the pants opinion only you uniquely advance. We have put this in the public domain so as to not personally profit. You are certainly entitled to your opinion--but it is just that and is most certainly not based on objective, non-negotiable fiduciary criteria of statute, case law and regulatory opinion letters, top technical experts and industry leading practiotioners by market segment served.



As for John Olsen's citation of 19g, if you John were to read the Dodd-Frank in its entirety it specifically cites, brokers, dealers and advisers through out. This section only refers to brokers and dealers, who have never acknowledged fiduciary status.

Indeed, it supports what I have been saying all along, brokers are not advisers and the industry and regulators agree. The point is John Olsen is a broker, and agrees he does not owe his clients an ongoing fiduciary duty of care and loyalty, but incongruently maintains he is a fiduciary. John is totally confused and is misleading by claiming fiduciary status. When John becomes accountable for every recommendation he makes and every holding he monitors on behalf of his clients in the client's best interest to include insurance contracts, he then becomes a fiduciary. Any less accountability does not qualify for fiduciary standing.



SCW

[Lucullus]

Bradley,

You may wish to pursue debating with Mr. Winks, but I'm disgusted with his mischaracterizations, misstatements, and outright fabrications. He cannot comprehend what he reads and attributes to others positions they have not taken and ignores (when it's convenient) those that they have taken. He offers his own opinions as established fact and denies any facts presented by others that contradict those opinions.

He denies the validity of any analysis that he's incapable of understanding (which, lately, seems to be everything). (Hint: Sect. 913 authorizes the SEC to impose a fiduciary standard, no less strict than that applying to investment advisors, upon "brokers" but declares that such fiduciary standard may not dictate an ongoing standard of care (913g(1)). As this clearly doesn't conform to his mantra that ongoing care is an indispensible element of fiduciary duty, he simply ignores this evidence, or, when it's pointed out to him, pretends that it means that brokers are not fiduciaries).

I can abide his frequent bufoonery and even his wretchedly poor writing, but I've had enough of his mendacity. Serious debate requires that the participants not only be able to distinguish between falsehood and truth but demonstrate a respect for the latter. He fails on both counts.

- John

[Stephen Winks]

John,


Your reading Dodd-Frank is totally inconsistant with the expert commentary of legal scholars.



You are entitled to your insurance agent centric views of advisory services which do not entail an ongoing fiduciary duty of care and loyalty to the consumer, but in doing so you are not entitled to a misleading declaration of fiduciary status.



SCW

[Bradly T.]

Talk about misleading.....outright lies is more like it. You have clearly stated the fiduciary duty includes:


* Custody of assets.

* Discretionary trading authority.

* Advisor created and delivered position and performance statements.

* No use of mutual funds.

* Moment by moment tracking of all securities held. (for frequent trading I suppose - why else?)

* A singular standard for all fiduciaries.

* The requirement to manage client portfolios to be considered a fiduciary of any kind.

* No one can act in their clients' best interest without all the above.



Not one single bullet point is true. Not even one. I mean really....you can't come up with ONE FACTUAL element of fiduciary duty? And you're an expert? You continue to ignore the reality that the DEFINITION of fiduciary is being changed and NOT the practices "affected". No current business model will end....or significantly change.....except, of course, the RIA model which will now be under a new SRO - either FINRA or managed by them, new disclosures, new rules, and new costs. What you insist is true is total fallacy/fantasy!! Hell, it's not even true now and never will be true....outside of institutional management of others' money - an appropriate environment for your definition.



The only meaningful definition of fiduciary is: the application of a consistant, professional, and prudent process that serves what the fiduciary believes and can demonstrate is in the clients interest and the client interest is greater than the advisor's, who must disclose compensation sources, conflicts of interest - real and potential, and all costs to the client. Write it however you want....that's the guideline in layman's language. An allocation agreement is used by RIAs to limit their liability and duty to a specific amount of money specifically under advisement/management. Many fiduciaries have far greater obligations and liabilities - RIAs have about the least duty to clients of all fiduciaries, many of whom have responsibilities far exceeding a singular pocket of money under management.



It's quite obvious you don't know the first thing about the multiple complexities or realities that real fiduciaries operate under every day. Most of them/us need far more than an allocation contract to meet the obligation! But do carry on....

[Lucullus]

Bradley,

Nice synopsis. I think that horse is dead. So I'd like to propose that we consider something else (for the moment, at least).

One element of the "standard of care" debate that seems to have escaped widespread attention is the potential impact of Sect. 989J of Dodd-Frank. As I read it, it amounts to an "end run" around the existing arrangement in which regulation of insurance is left chiefly to the states. It begins by declaring that "any insurance or endowment policy or annuity or optional annuity contract" will be treated as an exempt security, under Sect. 3(a)(8) of the 1933 Act IF -

The value does not vary with the performance of a separate account (that is, is not a variable contract) AND

that satisfies the non-forfeiture laws of the state in which it was issued OR

in the absence of such laws, satisfies the NAIC Standard Nonforfeiture Law for life insurance or annuities (whichever applies)

AND (and this is where it gets interesting)

that is issued on or after 6/16/2013 in a state that adopts suitability requirements that substantially meet or exceed the NAIC Suitability in Annuity Transactions Model Reg of 2010 AND any "successor modifications" to that Model Regulation within 5 years of the NAIC's adoption of same

OR is issued by an insurer that has adopted that Model Reg and any successor thereto within five years of its adoption by the NAIC.

What's all that mean? I believe it means that every insurance or annuity policy that is sold by any insurance agent in any state after June 16, 2013 will retain the status of an exempt security (under 3(a)(8) at least; it may be exempt under one or more other rules) only if either the issuing state or the issuing insurer have adopted suitability rules at least as stringent as the 2010 Model Reg that was promulgated last year to apply ONLY to annuity sales.

If those conditions are NOT met, that contract (which might be ANY kind of life or annuity contract) MIGHT be deemed by the SEC to be a "security", subject to its (read: FEDERAL) regulation.

The implications are very interesting. I'm a big fan of that annuity Model Reg. It was high time that somebody put some specificity to the concept of "suitability as it relates to annuity sales, and I see no reason why the factors cited in that Model Reg (which are precisely the same 12 factors cited in NASD Rule 2821, which is now FINRA Rule 2330) should not also apply to life insurance sales. But I find the "Federal end run around state control" aspect potentially troublesome.

Dick Weber, Ben Baldwin, and I will be including a discussion of this issue in the May, 2011 video teleconference sponsored by the Society of Financial Service Professionals, which will be broadcast from Philadelphia on May 18th. (We'll be discussing the "suitability" and Fiduciary standards too, of course).

The rules are, as you noted, changing, and anyone who gives advice about insurance or investments had better learn how the requirements that will come out of this process will affect him or her.

- John

[Stephen Winks]

Bradley T,


Was that post supposed to describe anything remotely close to anything I have said. You are the guys that believe the moion landing was a fake. You should have been banned from this forum years ago.



Just wait til July my friend, we will then see a major Global financial institution make you look like you have no clue, but then again, you have no clue.



SCW

[Lucullus]

"Just wait til July my friend, we will then see a major Global financial institution make you look like you have no clue, but then again, you have no clue."

Res ipsa loquitur. [snicker]

[Stephen Winks]

Lucullus,


Your contemp for the responsible support of fiduciary standing of brokers based on objective fiduciary criteria of statute, case law and regulatory opinion letters says a lot about your professional ethics--which is what fiduciary standing is all about.



I am not suprised at your glee which comes at the expense of the best interest of your clients.



Believe it or not, a very large global financial services institution which seeks market leadership by acting in the best interest of the consumer will be making an announcement in July which will materially change the world you work within where you do not have an on going fiduciary duty of care and loyalty to your clients.



This entails complexity beyond your comprehension which requires professional management which you have deemed too complex to phathom. Just because you don't get it, don't comprehend it, don't view it consistent with your odd insurance centric view of advisory services--doesn't mean our largest global financial services institutions with unlimited resources do not want to do the right thing on behalf of the consumer in the consumer's best interest. Innovation is what has made American businesses great globally and through innovation our global dominance in financial services will be perpetuated.



There are actually top firms and top executives who hold the best interest of the consumer and the fiduciary standing of the adviser in high regard.



SCW

[Lucullus]

"Pay no attention to that mind behind the curtain, Dorothy!"

[snicker][snicker]

[Stephen Winks]

Lucullus,




You could not be more ill informed, more misleading to you client and student constituency or a better example of abusing public trust and to further find amusement in this deceit is beyond any sense of decency.


This is why regulatory reform is needed and why a federal fiduciary standard should apply to insurance agents.





It is particularly interesting when your misinterpretation of 19g of Dodd-Frank is pointed out which very specifically states brokers have no ongoing fiduciary duty of care and loyalty to their clients which I mave maintained all along while advisers clearily do have an ongoing fiduciary duty of care and loyalty, rather that acknowledge your arguement has no substance which would sustain its veracity you choose to disparage.

On what basis do you wish to constructively contribute to the well being of the industry? Is it fact, principled disagreement, or just disparagement of everyone who disagrees with your insurance centric views of fiduciary standing where one can be a fiduciary with no ongoing fiduciary duty of care and loyalty to the consumer.



Just on the surface, any layman would deem your contention absurd--as I am sure the courts will in adjudicating the abusive practices you promulgate.



SCW