How SIFMA, FSI , FINRA and the SEC Conspired to Doom the Advisory Profession

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Let us not claim we were “unaware.” Let us not claim “fiduciary fatigue.” Especially when the consequences are so grave.

Instead, let us recognize that – through “harmonization” – the broker-dealer community, aided and abetted by the SEC, is destroying the fiduciary standard, while imposing only new “casual disclosure” obligations upon broker-dealers. At its very core, this is an effort to make RIAs/IARs and BDs/RRs look identical.

And – once this is accomplished – FINRA will swoop in to seek oversight over the “harmonized” broker and investment adviser communities.

We must fight to ensure that our roles remain different. Fiduciaries represent the client, and act as the client’s representative, with a high degree of expertise. Brokers buy and sell products and securities, they represent issuers and product manufacturers, or act as agents to facilitate trades; they operate in arms-length relationships with their customers.

Let us not forget the principle, thousands of years old, that no man can serve two masters. You cannot be “partly loyal.” You are either loyal to the client’s interests, as a true fiduciary – or you are not.

Let us not merely surrender and then – a few years from now – lament that FINRA oversees us with a heavy burden of regulations. Let us not as some distant point in time just wistfully recall that once we had a vision of a profession where we could be treated respectfully and presumptively as professionals, and not as criminals.

If we ever desire to become true professionals – trustworthy in the eyes of our clients and the public-at-large, proud of our status as protector of the financial futures of our fellow Americans, and making a huge impact in the process of efficient capital formation and U.S. economic growth – then we must act. Now. Through our professional associations. And individually.

Here is a link to a sample letter you can send to your elected representatives to encourage them to stand up for the fiduciary standard. Better yet, visit your elected representatives at their home offices or in Washington, D.C.