Remember - It's Not Your Money: Financial Advisors' Daily Digest

by: SA Gil Weinreich


Jake Zamansky is appalled that the financial services industry is trying to kill the fiduciary rule in court.

ETFguide and Reuben Gregg Brewer discuss the ethics and investment propriety of using leveraged ETFs.

Kevin Wilson recalls how the professional skepticism of his previous career in science has served him well as a wealth manager.

On a couple of occasions, I heard of a broker who had a big sign on his door saying, "Remember: It's Not Your Money!" That is without a doubt a good thing for financial advisors to keep uppermost in mind.

I thought of that story as I read SA contributor Jake Zamansky's article condemning a consortium of financial services industry groups who have filed a lawsuit intended to kill the Department of Labor's new "fiduciary rule." Writing about the industry's claims against DOL's "arbitrary" and "capricious" rules, Zamansky had this to say:

"There is nothing 'arbitrary' about treating customers properly instead of pushing them to buy high-fee, proprietary products in their retirement accounts. There is nothing 'capricious' about giving clients proper advice."

The pro-fiduciary rule side always seems to have the moral upper hand in the debate for the simple reason that no one would dare endorse not putting client's interests first - at least not in those words. That is to say, even rule opponents insist that they favor client-friendly advice, arguing that the new rule limits access to advice, despite its good intentions.

But I'm not weighing in on the Constitutional propriety of DOL's rule, on which reasonable people may differ; the above was meant to show there is an opposing argument.

Still, whether or not the rule ultimately comes to fruition, one reality will not change, which is that human nature cannot be repealed. And since greed is an oft-found human trait, investors would do well to make sure that even the fully fiduciary-certified advisor they choose possesses not only investment acumen but, first and foremost, sterling character.

Nothing short of due diligence is needed to ascertain that; unfortunately, even door signs can be misleading.

Now for today's advisor-related links:

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