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Financial Advisers and Regulation

I’ve read throughout countless articles, announcements, and online posts regarding the DOL Fiduciary Rule. As is expected with anything political, there are polar-opposite opinions and not much apparent middle ground.

Regulation is important to protect consumers. Consider the automotive industry with no safety or emission regulations, the construction industry with no building codes, or the tobacco industry with no restrictions against predatory advertising. Now think about how important money is to people. It is their security, and next to family and health, it is the most defining thing that people have.

Since money is so valuable, why shouldn’t it be regulated and mandated to be advised on in only the best interest of those paying for the advice in the first place? Lives are ruined, families are destroyed, businesses are shuddered, jobs are lost, etc. by bad financial advice delivered by financial advisors who aren’t held accountable. Financial advisors have an enormous amount of influence over their clients’ lives and that influence can impact multiple generations within a family.

In many ways, the financial services industry created this issue when brokers, insurance agents, and anyone else who wanted to started calling themselves financial advisors. They claim to do financial planning when they really don’t and imply directly or indirectly that they always act in the best interest of their clients. These issues, along with very powerful marketing from large financial firms have led to clients being misled with regard to the quality and the intentions of the services and products that they receive.

With or without regulation, the industry is changing. With change comes opportunity, and good companies will find creative ways to fill the needs of clients. Whether one agrees with the DOL Fiduciary Rule or not, it is a changing agent to the financial services industry.