Drawing from decades of corporate experiences, Drucker might well have applied lessons learned years ago from GM and Ford. In his 1992 book, Managing for the Future, (Dutton Adult), Drucker talks of his time with their joint management and labor committees. He notes, interestingly, what he could not do, or what he failed to do: "I could not persuade either unions or managements that what they mean by the word quality is not what (their) customers mean…GM and Ford have a compensation structure that rewards dealers for sales of new cars, not for service…Toyota on the other hand rewards service… Why can I not persuade Ford and GM I am right? Because when I tell them to go outside (their companies), they simply talk to their own dealers."
In the same discussion Drucker advises senior managers, "The next time a salesman goes on vacation, go out and take his or her place… The point of the exercise is that it forces you outside into the market, where results are. Remember, there are no results inside the firm. Up to the point where the customer reorders, there are only costs."
Drucker would certainly advise Wall Street executives today to find out what retail brokers think. What would brokers tell corporate bosses? About being a fiduciary, they might "surprise" them. Many would say "Bring it on!"
The Committee for the Fiduciary Standard partnered with SEI Advisor Network and surveyed 890 brokers (including commission- and commission-and-fee-compensated) and advisors (fee-based and fee-only-compensated). Findings from the survey include:
Brokers support the fiduciary standard. A majority of brokers (53%) agree all professionals giving investment or financial advice should meet the fiduciary standard; only 27% disagree, while 19% are unsure. Further, 61% agree brokers should not be allowed to ask clients to waive the fiduciary standard.
