Professor Arthur Laby might have gone back 80 years in his discussion of fiduciary at TD Ameritrade's Fiduciary Leadership Summit in Palm Beach, Fla., but Don Trone was having none of it.
"I'm going to start with the 4th century B.C. and Aristotle's notion of ethos," Trone began during his portion of the afternoon presentation. "It involves leadership, stewardship and governance. I just described something without naming it. What could it be?"
When Trone, president of the Leadership Center for Investment Stewards, heard fiduciary shouted from the audience, he noted the definition of fiduciary he frequently hears.
"It's often defined as doing what's in the best interest of the client," he explained. "Every time I hear it I do this sort of Popeye face. I think, 'really?' I've never gotten behind that definition because for a true fiduciary, it doesn't have to be talked about; it's just understood."
Referring to his time as a Coast Guard search and rescue pilot, Trone noted he never once had to say he would jeopardize his life to save others; it was just understood.
"Through the eyes of your clients, you have to be viewed as a leader. If you're not, you'll never be able to take them through a financial crisis."
Trone claimed that everything elite advisors are doing evolved from "fiduciary requirements for ethical discernment."
"Three major events occurred as fiduciary was developing," Trone said. "The rise of the personal computer allowed for tools like asset allocation software, reporting features and others. Then there was the rise of no-load products and lastly there were investment advisory custodial platforms. Had the confluence of these events not happened at the same time as fiduciary, we would not have the industry we do today."
