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Category: Bob Veres’ Blog

Monkeys Go Home

If you’re as old as Methuselah, like I am, you might remember a pivotal moment in the evolution of the planning profession, when Forbes magazine noticed that brokers, life insurance and tax shelter salespeople were starting to call themselves ‘financial planners.’  Many of them were creating financial plans, using computer programs where they would carefully enter a client’s detailed financial information, and no matter what client data was typed into those fields, the output, in the form of a very professional-looking financial plan, would strongly recommend that the customer put his/her entire investment portfolio in the stocks that the broker…

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The Great Unused Resource

Some years back, as a standard part of my industry presentations, I would ask the audience how many of them would, if they could, go back to where they were 10 or 15 years ago, career-wise or, for that matter, life-wise.   Very rarely would a hand go up.  And then I would draw the obvious conclusion: 10-15 years of change have been beneficial to you in your career and in your life—all of you, without exception.  And yet we instinctively fear and avoid change in our lives, preferring where we are now to where we could be if we…

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Custodial Dynamics

I’m writing a new version of the Custodial Alternatives white paper, which profiles some less-well-known options that advisory firms caught up in the Schwabitrade acquisition, or firms that are suffering long hold times, could consider.  In that context, I’m also thinking about how digital onboarding is becoming more seamless and, if Nest Wealth is a harbinger of things to come (see previous article), much more convenient for advisors and clients to navigate. The key takeaway is that changing custodians, and repapering clients, is becoming less painful—and easier to contemplate.  Following this logic a bit further, we might see custodial relationships…

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The SEC’s Own Compliance Culture

I’m beginning to think the term ‘compliance’ ought to be repurposed.  To simply ‘comply’ with legal and regulatory guidelines is not exactly a lofty standard, yet that’s the term that broker-dealers and wirehouse firms have adopted, and it seems to be the term preferred by the our regulatory friends over at the SEC.  Maybe you see something different, but from where I sit, there is no actual encouragement from federal regulators to go beyond (somewhat grudging) compliance and embrace higher standards. Like fiduciary, for example.  Recently, we heard compelling evidence that the SEC wants to downplay the fiduciary concept among…

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Yet Another Modest Proposal 

You may have read about a recent ruling by a Superior Court judge in Georgia who discovered what I think we all knew: that FINRA runs its arbitration system like a kangaroo court, putting its thumb firmly on the side of the scales of justice that benefit its member brokerage firms.  I think it’s long past time for the financial planning community—and anybody who cares about protecting consumers—to call for an end to the arbitration agreements that the brokerage firms routinely had to their clients.  I could be talked into letting them require arbitration agreements, but only if the forum…

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A Hierarchy of Conflicts

I was talking with Knut Rostad, founder of the Institute for the Fiduciary Standard, about his recent conversations with people at the SEC.  He is cautiously optimistic that the “new SEC” is, for pretty much the first time in his career, open to hearing about how a fiduciary standard for all advice givers would be a significant step forward in consumer protection.  But he is also getting feedback that nobody at the top wants to alienate the staff—and the SEC staffers have mostly been hired by SEC leaders—going back 20+ years—who have been far more sympathetic to protecting wirehouse profit…

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Member Benefits

As I was writing the lead article for this issue of Inside Information, I came back to a question that I’ve been pondering ever since I worked at the International Association for Financial Planning back in the 1980s: what is the purpose of a professional association?  The easy answer is: to serve the members—and I would argue that some associations, including, for a couple of decades, the Financial Planning Association, have gotten that backwards, and somehow assume that their own health and viability is of key importance to the profession.  I remember, from personal experience, when the IAFP made that…

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Fiduciary Advocate

By now, I’m sure most of you are familiar with the Committee for the Fiduciary Standard—but if not, well, it’s a group of prominent advisors who advocate that anybody who holds out as a financial planner or advisor be held to a strict fiduciary standard.  I participate in their discussions, though I’m not formally a member. Every year, the Committee selects a worthy candidate to be given its “Fiduciary of the Year” award.  Past winners include Ron Rhoades, David Tittsworth, Skip Schweiss, Phyllis Borzi, Harold Evensky, Barbara Roper and, in 2016, the entire U.S. Department of Labor.  For the past…

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How the SEC Has Strayed From Its Mission

In case you missed it, the XY Planning Network—Michael Kitces and Alan Moore—have filed two petitions with the SEC, and they’re far more ambitious in what they’re asking for than anything I’ve seen from our trade or professional organizations.  In fact, they make the case that the SEC has totally perverted its consumer protection mission, which is clearly spelled out in the law, for at least the past 20 years.  If the petitions get traction, it could bring about huge shifts in the regulatory playing field for fiduciary advisors and Wall Street—and benefit financial consumers perhaps most of all. One…

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