For a long time, humans have understood that “The pen is mightier than the sword.” In 16th century England, the adage was “No more sword to be feared than the learned pen.” Playwright Edward Bulwer-Lytton inserted what we think of as the modern saying into an 1839 drama. Why the history lesson? Because even in an age of electronic media gone amok, the truth behind the saying remains as strong as ever.
The big ‘pen’ argument right now is about ‘fiduciary.’ Folks at banks and trust companies, retirement plan sponsors, and attorneys know that “fiduciary” is not some amorphous concept that the SEC can define after a six-month study, but a rock-solid concept rooted in common law and case law.
At the Broker/Dealer of the Year roundtable in August, David Springer of Prospera Financial answered a question on how a fiduciary standard would affect independent broker-dealers by saying simply, “We already are held to that standard.” Mark Tibergien has said that RIAs have hid behind the fiduciary standard for too long, suggesting that as a differentiator, an advisor must show her value beyond the mere recitation of the “I’m-on-the-same-side-of-the-table-as-my-clients-since-I charge-only-a-fee” bromide.
Culture, as Mr. Tibergien has also pointed out, is how people behave when the boss is not around, and nothing defines culture more than the words you use in talking about and to your colleagues, employees and clients. Be careful in the words you use. Avoid hackneyed phrases like “value proposition” and the aforementioned “same side of the table” and the solemn vow that you provide advice without a “conflict of interest.”
Sorry, but everybody has conflicts of interest. Acknowledge your conflicts and don’t let them unduly influence the advice you give and the investments you recommend.
Be aware of the pronouns you use in referring to clients and colleagues. Make sure your colleagues show respect to each other and to clients. Acknowledge that you live in a multi-ethnic, multicultural country where people celebrate their differences while pulling together on the important issues. Remember how Americans put aside their differences after the horrible events of 9/11? That’s not the first or last time we’ll do so.
The strength of words to affect people’s behavior can be seen in the 1949 musical South Pacific, where Oscar Hammerstein II has Lieutenant Cable sing:
You’ve got to be taught before it’s too late
Before you are six or seven or eight
To hate all the people your relatives hate
In his 1987 musical riff on fairy tales, Into the Woods, Hammerstein prot?g? Stephen Sondheim has a wise character advise a couple about how to raise their child:
Careful the things you say
Children will listen…
Children may not obey,
but children will listen
What words are you using? People are listening.