Benefits PRO (January 18, 2017) - Firms conduct 'charade' of acting like advisors to customers 'while relying on their trade associations to argue the opposite in court'

Fiduciary or salesperson? An analysis from the Consumer Federation of America and Americans for Financial Reform finds that 25 major brokerage firms and insurance companies say one thing to consumers and another to courts.

And firms could be missing the boat by not embracing a fiduciary standard, according to a Cerulli report, which said that as investors are increasingly willing to pay for advice, firms aren’t responding to those investors’ preferences.

In a statement, Micah Hauptman, financial services counsel, CFA, said: “Financial professionals who act like retirement investment advisors should be held to an advice-based standard, and that’s what the DOL rule does. Firms are sorely mistaken if they think they can continue the current charade in which they act like advisors to their customers while relying on their trade associations to argue the opposite in court in order to try to kill the DOL rule … People saving for retirement deserve to know where their advisor and the firm that their advisor works for stands on this issue.”

Cerulli’s report pointed out that even as younger people under age 40 make up the largest group that is increasingly willing to pay for investment advice, “the relatively meager savings of most investors in this cohort and a financial advice delivery system built primarily around investors’ asset levels leaves many in the segment underserved.”