Fiduciary Advice: Where Do We Go From Here?

Register to hear Knut speak at the AP Thought Leader Summit about the impact to advisors of the proposed controversial DOL fiduciary rule.

An historic realignment of fiduciary advice has snuffed out 40 Act principles. The SEC, the coming DOL Rule, and CFP Board standards have rejected them. The realignment reveals a path of destruction – to the law, language and logic.

Knut Rostad is speaking at our virtual conference, the AP Thought Leader Summit, on October 6th at 3p ET. Register for free today!


Where do we go from here?

Start with a plan. A sober view of strengths and weaknesses (assets, liabilities). Set goals. Think outside the box.


This year, 2020, will fill the history books with events that stand out over the prior century. The federal regulation of fiduciary advice belongs with this history.

Fiduciary advice may seem to pale in comparison. It shouldn’t. Think October 1929.

After a decade of intense BD industry lobbying, in the past 16 months we have witnessed an historic realignment of advice regulation. The advice standards of the Advisers Act of 1940 are gone. The SEC, the coming DOL Rule, and new CFP Board standards reject them.

The heart of the 40 Act – the need to separate advice from sales and eliminate conflicts – has been ripped from the law. As I wrote last month in AP, this once vital law is essentially the investors’ civil rights legislation of 1940.

The CFP Board publicly rejects 40 Act principles. It champions business-model neutrality and interprets its neutrality to mean fee and commission compensation have no bearing on fiduciary fidelity.

This realignment is not just a clear defeat for fiduciary advice regulation. It is more. The decade of lobbying and advocacy has seriously wounded the three pillars on which investor trust of the capital markets relies – law, logic and language.

‘Where do we go from here’? Where is fiduciary advice in 2020? In 2009, the Obama administration challenged the SEC to establish, “a fiduciary duty for broker-dealers offering investment advice and (to harmonize) the regulation of investment advisers and broker-dealers.”