About a year or so ago, I was having lunch with an attorney friend of mine with whom I often play golf. We got to talking about financial advisors and I pointed out that under the Investment Advisers Act of 1940, registered investment advisors have a fiduciary duty to their clients, but that stockbrokers are exempted from such a duty. His response was classic: “That can’t be right; you must be mistaken.” I pointed out that I’ve been covering financial advisors for nearly 25 years, and I’m rather confident that’s what the ’40 Act says. But I don’t think I ever convinced him, a well-educated, practicing attorney, that stockbrokers and other financial planners who hold themselves out as financial advisors have no such duty to put their clients’ interests ahead of their own, unless they are also RIAs.

Fast forward to a month or so ago, when a NAPFA board member brought to my attention a survey that her organization conducted during this past winter.

It seems those tireless defenders of all that’s good and pure in the financial advisory community polled about 1,000 consumers and discovered that 98% of them understand what a fiduciary standard is, and further, 97% would prefer to work with an advisor who holds him or herself to such a standard.

Well, just call me a jaded old journalist, but those survey results sent my BS-o-meter off the charts. Let’s ignore for the moment that those answers perhaps coincidentally parallel NAPFA’s current Focus on Fiduciary crusade. Can it possibly be the case that 98% of consumers really understand what a fiduciary is? And that nearly that number know that most “financial advisors” are not fiduciaries (unlike my misguided attorney friend) and would prefer to work with one? I’d like to believe it, but common sense tells me no. Of course, I could be wrong; and I’d love to hear what your experience and intuition tell you.