August 24, 2010
In my 32 years as a financial planner, I have seen regulations evolve from the near non-existant to the overwhelming. A lot of the regs are important in protecting the public and providing guidance to the professionals. At some point, the rules become burdensome and anti productive. The time spent on paperwork consumes precious time that could otherwise be spent helping clients.
Explaining some of the regulations to clients leave them scratching their heads.
The point is that we are already regulated at a very high degree and the practice of financial planning is, therefore, loosing it's creativity. Regulation demands conformity. This forces planners to take the least path of resistance when offering solutions and strategies to clients in order to avoid even the hint of impropriety. Where planners excelled, using ingenious strategies and thinking out of the box, we will by necessity, all become robots conforming to the lowest common denominator.
This is bad for the industry and it is worse for the client.
Since most of the regulators and examiners have little or no practical experience, it seems like an easy choice to have a 'multiple choice' review rather than an essay test.
We are dumbing down the industry by dumming down the regulations to suit the regulators.
Everybody looses except the regulators....a sorry state