While Senator Christopher Dodd’s financial services reform bill, as it currently stands, excludes a fiduciary standard for brokers, Don Trone, CEO of Strategic Ethos–and founder of Foundation for Fiduciary Studies–says he doesn’t think proponents of the fiduciary standard “are losing any significant ground.” The momentum, he says, “is still toward a fiduciary standard, and we’re just going to take a more prudent timeline to get there. The wirehouse leadership, even post Dodd, continue to talk about embracing a fiduciary standard.”
Ultra-high-net worth folks, too–particularly after the Madoff Ponzi scheme–are embracing “fiduciary-like” standards as well, Trone says. “The ultra-high-net-worth have an aversion to the word fiduciary because…the term has been associated with private trusts and their roles on philanthropic boards,” he says. High-net-worth families “feel they are incurring liability in the management of their own wealth, and they don’t like that position.” However, after the Madoff scandal, there’s been a “very strong reaction from the wealthiest families around the world for someone to take the initiative to define standards for wealth management,” Trone says.