Crunch Time Part II: CFP Board’s ‘D-Day’

While these concerns — and the evidence that supports them — are troubling enough, what I didn't write about earlier is the historical and current perspective that makes clearing up these "ambiguities" in the board's standards of crucial importance. Of course, I'm talking about the growing public awareness of the fiduciary advisory standard and its importance to their well-being.

I'm not saying that retail investors have suddenly become legal scholars, versed in the nuances of fiduciary law (the '40 Act, ERISA, FPA v. SEC, or Don Trone's invented "five fiduciary levels," etc.).

But, as Tom Nally observed — and I've heard from countless independent advisors — most investors today are aware of the existence of a "fiduciary standard of client care" and that it involves acting in their best interest. They also know that not everyone who calls themselves a "financial advisor" is required to live up to that standard.

I'm also not saying that the financial press (which is typically a lap or two behind the leading edge) has fully gotten their heads around all the implications of having a fiduciary standard versus not having one.

But one thing the media is good at is recognizing a trend. And the interest/demand for fiduciary advisors appears to be turning into a major trend.

In their zeal to get ahead of this trend, how long do you think it will take some of the top reporters to realize that in addition to fiduciary advisors and non-fiduciary advisors, there are also "part-time" fiduciary advisors; who potentially cause the most confusion among investors? And then, we'll see story after story about how to spot and avoid these part-time fiduciaries because of their confusing responsibilities.

At present, due to their ultra-confused and confusing standards, CFPs would fall at the top of this list. In this era of fiduciary awareness, when those stories start to break, my guess is that it will put the entire financial planning profession on the wrong side of the conversation — right there with boiler-room operators and penny stock sales folks. And that's not an easy place to come back from.

Those are the table stakes. If the CFP Board doesn't get financial planners on the right side of the fiduciary issue right quick — as full-time fiduciaries — it runs the very real risk of marginalizing the entire profession, which I've been covering for over 30 years.