industry insight BY
With fiduciary advisors taking market share from the brokerage firms,
will FINRA exact payback? Here’s a glimpse of what may come.
To celebrate the new year, the magazine let me take an extended trip into the future so that we could provide a more accurate view of what’s ahead for the profession. I materialize into a chilly afternoon street scene in Chicago
in 2032, with the road full of commuters in robocars, reading the day’s
news while their cars navigate the busy traffic. An empty car pulls
beside me and opens its side door — a clear invitation.
“Where can I take you today?” a mellow voice from the dashboard
asks as I settle into the seat.
“I want to talk to a financial planner,” I say.
“I have 637 financial planners in my address book,” the voice replies.
“Please give me additional criteria.”
“Fiduciary,” I say.
“That category includes all 637.”
“Compensated only by fees.”
“That does not eliminate any.”
“Wow,” I say, taking notes.
“That is not a criterion I recognize.”
“Sorry. What do you suggest?”
“You could choose a planner who
works for BAMMSSBNS or GDBUBSCS,”
the car offers helpfully, swerving around
a pedestrian and narrowly avoiding an
“I’m sorry. I don’t recognize those.”
“Bank of America Merrill Morgan Stanley Smith Barney Nomura
Securities, or Goldman Deutsche Bank UBS Credit Suisse,” the car says
with what seems to be exaggerated patience. I have the uncomfortable
impression that its cybercircuits think it picked up an idiot.
“Are there any other choices?” I ask timidly.
“Let’s restrict it to a BAMM-whatever financial planner who has not
been sanctioned by any regulatory authorities or lost an arbitration
Instantly, the car zooms out of the slow lane, takes a ramp and
whizzes alongside Lake Michigan.
“Wait! Don’t you need any more criteria?”
“You have specified the financial planner for
whom you were looking.”
meet the planner of the future
The car makes an abrupt left and skids to a halt
in front of a large lake-front office building.
“You’ll find him in Suite 1745. The elevators are
just past the virtual security guard.”
“I’m here to talk with a financial planner,” I
tell the receptionist.
“Certainly,” she says cheerfully,
handing me an iPad that weighs no
more than this piece of paper. I sign a
lengthy contract that requires me to
resolve any disputes with an arbitrator
of my planner’s choosing and disclaim
all responsibility for bad investment
outcomes. It also includes a terrifying
list of conflicts of interest. As I hand
back the tablet, my planner emerges
from the hallway.
The planner’s face shows every hour
of the 20 years since I had last seen him, but he
was not hard to recognize. “Bob, what are you
doing here?” he asks.
“It’s an undercover assignment,” I say
quickly as we walk into his office. “Listen, I have
a lot of questions and not a lot of time. The last
time I saw you, you were one of the most ideal-
istic, client-centered planners I knew. You were
a champion of the fiduciary standard. How is it
you’re working for a big brokerage firm?”
Joe slumps in his chair and motions to me to
sit. “It’s the only way to get a license these days,”
Ever since FINRA
took over RIA
regulation in 2032,
it’s been a long, slow
push until finally
you can’t practice
anymore as an
January 2013 Financial Planning 21