On the Merrrill rule and the Focus on Fiduciary campaign.
We haven't won the war, it's one stop along the way. We don't know what the SEC will do. In the meantime, we think that while the FPA has done an excellent job fighting this in the courts, the next steps will be fighting it in Washington. And we think the best way to do that is to take the message to the consumers. That's what we did with "fee-only" which worked very well, and now we're taking the fiduciary message directly to the consumer. If we get enough traction on it, which we think we will, the markets have a way of changing things in this industry. Think of it as supply and demand. In the past there was very little demand for fee-only planners because the public--the market--didn't know what it was and didn't understand the differences between being fee-only, fee-based, or commission. As time passed, and more people wrote about it, and it got more play, the market slowly started to demand fee-only planners, and the industry grew as a result of the demand--supply came online. We believe the same thing can happen with fiduciary. There's some debate on what it means, but in general everybody accepts the concept that acting as a fiduciary means acting in someone's best interest. If we can get out that simple concept, the public will start demanding that people behave like a fiduciary.
On how to measure whether the fiduciary message has gotten through to the public.
There are a number of ways. It needs to be a sustained campaign. It takes a lot of information, and time, to change behavior, to change opinions, to educate a broad consumer base. If we hear more about it in Congress, in the consumer press, and NAPFA can measure it in the consumer referral program that we have. That's where we can get a metric. While in years past, we could expect 20,000 such consumer referrals--people seeking fee-only planners--this year we're on track to get 60,000 such referrals.
To hear more on Orecchio's agenda and the NAPFA benchmarking tool, please see the Podcast section of www.investmentadvisor.com.