I think we all know that the financial planning profession is drowning in paperwork and the problem is only going to get worse.
If you want to communicate with clients using any form of social media, you either have to have "Daddy" (I mean, the compliance department) tell you it's okay after reading your message, or you have to track every single thing you say and prepare to defend it before an SEC auditor, who will probably write up a deficiency no matter what you say or do.
If you want to put an advertisement in the local paper, be ready for half the advertisement to be given over to disclaimers.
And if you're currently SEC-registered, you're probably already resigned to the idea that FINRA is going to be promulgating a new rules-based system for determining if you acted like a fiduciary each and every day for the rest of your business life.
Do doctors, lawyers or accountants face this kind of day-to-day regulatory hassle? Does anybody? I can tell you from personal experience that we journalists don't. If anybody came into my office and asked for books and records, I would have no idea where to start.
This vexing -- and increasing -- compliance hassle is generating a certain amount of frustration in the profession, and most of the people I talk with don't know where to turn.
Consider the membership organizations that are charged with watching out for your interests:
FSI lobbies Congress and FINRA on compliance issues, and then BD members use the compliance rules to control what their advisor representatives can do and say.
As one advisor put it to me recently: "Even the large firms are shrewdly utilizing compliance to make captive representatives out of personally-owned firms. They change the rules to benefit themselves, reduce payouts on products, all in the name of compliance."
I've talked with some advisors who discovered, to their surprise, that they are members of FSI without even realizing it; their membership dues are deducted from their payout and sent over to FSI along with their names.
The FPA and NAPFA (through the Financial Planning Coalition) lobby Congress and the SEC primarily on behalf of consumers.
The uniform fiduciary standard really would not benefit advisors. It would once again blur the line between those who sit on the same side of the table as consumers, and those who don't. Yes, there might be more safeguards in what brokers could do with consumers, but this would come at the cost of a clear marketing distinction that fiduciary advisors enjoy today.
So who speaks for the planner? Who is watching out for the business interests of the advisor and advisory firm in these lobbying activities? Are your membership dues being spent in ways that aren't helping you or your business?
Is this something that needs to be fixed?
Please tell me what you think.
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For more on planning, client service, practice management and marketing, or to join the Inside Information community, contact Bob Veres at
