Does the way you spell “advisor” change your obligation to clients? The question of whether RIAs should describe themselves as “advisers” instead of “advisors,” to show their adherence to the federal Investment

Advisers Act of 1940 — and, for that matter, whether Financial Planning should follow suit — has come up in a couple of recent conversations with Skip Schweiss, managing director of advisor advocacy and industry affaris for TD Ameritrade Institutional.

While we both agreed that a vowel was a pretty weak hook on which to hang a planner’s fiduciary responsibility, his underlying point remains valid: that the confusing array of labels taken by financial professionals has raised questions for consumers about who exactly is regulated by the ‘40 Act, and who owes a fiduciary duty to clients.

“We’ve moved from brokers to wealth managers to financial advisors to financial advisers, the term that created the fiduciary advice model,” Schweiss said with audible frustration. In the process, he said, nonfiduciary advisors have wound up “confusing the consumer.”

A cynic might suggest that the resulting muddle is in fact the point. Indeed, our special report on the newest regulatory priorities out of Washington highlights other areas where the regulatory differences between brokers and RIAs are becoming blurred, with the SEC overlapping with FINRA in both coverage — think dually registered and hybrid advisors — and agendas.

Our professional cynic, FP columnist Bob Veres, goes even farther in his column this month, arguing that the SEC’s efforts to examine more RIAs is an expensive waste of time and taxpayer money, especially when focused on advisors who park client assets with a custodian “and have no way to touch the money themselves.”

Meanwhile, other RIAs may want to ask themselves: What’s in their own name? And does a label like “wealth manager” — to take one posh-sounding term — boost their reputation with consumers, or make it more murky? 

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