Likewise, I don’t understand why it is “cute” to watch kids put unhealthy stuff into their mouths, like candy.
But, right now, I’m trying to understand why the Securities & Exchange Commission (SEC) has punted on the “fiduciary duty” of financial advisors?
I have a fiduciary responsibility to my clients, which means I have to always put their interests first. That doesn’t mean I will never make a bad investment. But, it does mean I will never hide any fees. It means I will never make any investment that pays me hidden fees or kickbacks. It means I will never buy bonds in my own account and then sell the bond to clients at a higher price, which is called a “mark-up.” It does mean I will always be honest with them, not just technically honest but holistically honest. All members of the National Association of Personal Financial Advisors are held to this fiduciary standard.
Stockbrokers are not!
When it was suggested that all financial advisors, including stockbrokers, be subject to the fiduciary standard, the brokerage houses had an unvarnished, old-fashioned “hissy-fit.” I’m embarrassed that the two Republican Commissioners kept insisting on “more study, more study,” effectively killing the fiduciary requirement for stockbrokers. Accepting the fiduciary standard would have been so much better for the investing public. Indeed, the SEC Chairman, Mary Schapiro, said “I still think this is a really important thing for the SEC to do for investors.”
I just don’t understand why stockbrokers don’t want to put their clients first?
Maybe, I should just mind my own business and try to comprehend something truly incomprehensible, like why my wife needs so many shoes? After all, who really needs 13 pair of black heels? Can anybody comprehend that??