Uniform Fiduciary Standard: Good or Bad? And for Whom?

The topic of this blog entry may initially seem pertinent only to those within the financial services profession. The reality is quite the opposite. Efforts to create a uniform fiduciary standard are perhaps most significant to the clients, the people who entrust financial professionals to oversee their nest eggs and help make decisions which put people on a forward path to progress in their personal financial lives. The concept of a fiduciary standard basically requires all of those ambiguous financial professionals (most of whom hold themselves out as ‘planners’ and ‘advisors’ to act in the best interests of their clients, a standard which is currently only required for investment advisor representatives, typically abbreviated as IARs. The way the law currently stands stockbrokers (aka registered representatives) are only required to act within a standard of ‘suitability’ when it comes to recommending products and strategies to clients. I don’t think I need to elaborate on the potential for abuses which exist within the ambiguous definition of ‘suitable.’

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