August 19, 2010
I am an individual investor, in the strict traditional sense of the word. I am also a FINRA arbitrator and a lifetime member of the American Association of Individual Investors. I have a PhD. I see a lot of dispute cases, and I give a lot of talks to individual investors.
After reading materials from investment "helpers" for a long time, I can attest that no one can understand exactly where any investment professional "stands" with respect to whether they have your interests at heart or not.
I do know, even if most of my friends do not know, that "registered investment advisors" have a fiduciary duty to the client. I strongly recommend that everyone be held to this standard. "Everyone" captures a broad semantic swath of all people who help other people with financial or investment issues.
Consumers can not know which labels that are used in commerce refer to what standard or level of fiduciary duty.
So, the standard of ficusiary duty that has been around for about 50 years and has been generally upheld and refined by the courts should become true for everyone. Then, no matter what someone calls themselves, or no matter who consumers happen to use to help them, our interests are always paramount. We want our "advisors" to simply be taking care of us, putting our needs first, etc.
I do not know how to solve the semantic problem of all of the different labels that can be used by people offering their assistance with financial/investment issues. This is currently a big problem for us, even if we all understood the various differences between different levels of duty of care (which we do not understand). So, it seems only logical that the best help for us is to hold "everyone" to the same standard, and hopefully a high one, such as the traditional fiduciary one. Please just do it.