A new advocacy group aims to tackle the consumer with a media campaign to explain the differences between advisers fiduciary standard of care and brokers suitability standard. The organization announced its formation yesterday. Calling itself The Committee for the Fiduciary Standard, it plans to launch a month-long campaign at some point in the near future.
All the research we see supports the idea that investors dont understand that an adviser is paid to represent their interests, while a broker is paid to represent the interests of their firm or the product, said Knut A. Rostad, a member of the committee and the regulatory and compliance officer at Rembert Pendleton Jackson, a registered investment adviser based in Falls Church, Va.
The Committee for the Fiduciary Standard will work alongside existing industry groups, such as the National Association of Personal Financial Planners, the Financial Planners Association and the CFP Board, to lobby Congress as it drafts legislation for fiduciary standards of care.
The Committee identified five core directives: put the clients best interest first; act with prudence, meaning with the skill, care diligence and good judgment of a professional; do not mislead clients, meaning provide conspicuous, full and fair disclosure of all important facts; avoid conflicts of interest and fully disclose and fairly manage, in the clients favor, all unavoidable conflicts.
Committees members include Blaine Aikin, chief executive officer of Ridgeville, Penn.-based fi360, a technology and training firm that supports fiduciary practices; Clark Blackman, founder president and chief investment officer of Kingwood, Texas-based Alpha Wealth Strategies; Harold Evensky, president and principal of Coral Gables, Fla.-based Evensky & Katz; Kate McBride, editor-in-chief of Wealth Manager magazine; and Ronald W. Roge, chairman of Bohemia-N.Y.-based R.W. Roger & Co.