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Regulation and Compliance > Federal Regulation > SEC

HighTower’s Weissbluth: ‘Brokers Are Butchers; Fiduciaries Are Dietitians’

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Elliot Weissbluth’s two-and-a-half minute whiteboard animation video recently posted on YouTube calling brokers “butchers” and fiduciaries “dietitians” is drawing quite a bit of attention—particularly since it was produced only days after a Goldman Sachs’ employee publicly resigned from the firm.

Just a day after telling AdvisorOne that Goldman Sachs’ management puts profits before clients, Weissbluth, CEO of HighTower Advisors, says in the March 16 video posted on HighTower’s YouTube page, that the distinction between a broker and a fiduciary advisor can best be summed up this way: “Brokers are butchers selling products; fiduciaries are dietitians looking after your health. The problem is that most people think that their butcher is a dietitian.”

Weissbluth says in the video that the “old school butcher” would never tell a client that eating too much meat is bad for their cholesterol level, and instead refer the client to “the fish monger down the street.”

Whereas a fiduciary advisor, he says, is akin to a dietitian in that the dietitian will “run all of her analysis and give me her best thinking of what is best for me.”

Naturally, comments on Weissbluth’s video vary from: “Pretty much sums it up…we are literally lambs being led to slaughter,” to just plain “stupid.”

But for advisors fighting to ensure that the Securities and Exchange Commission writes a rule to put brokers under a fiduciary mandate, it’s one more explanation of how they see the playing field among advisors and brokers currently functioning.

Todd Ganos, a wealth manager who writes the In the Money blog for Forbes, says that after watching Weissbluth’s video, “Ask yourself this question: What is it the Congress and the SEC doesn’t get?”

As it stands now, the SEC has yet to issue a proposed rule putting brokers under a fiduciary mandate due to pressure from Capitol Hill on the SEC to conduct a “more rigorous” cost-benefit analysis on its rule. That cost-benefit analysis is turning into a time consuming endeavor.

While SEC Chairman Mary Schapiro has said that a fiduciary rule proposal would likely be released this year, industry officials remain skeptical that such a timeline can be met, as economists at the SEC who are responsible for performing a “more detailed” cost-benefit analysis on the agency’s fiduciary rule will “soon” ask the public to weigh in on a set of questions regarding the agency’s economic analysis.

Schapiro said in comments at the SEC Speaks conference in Washington in late February that she “still strongly believes” that putting brokers under a fiduciary mandate “is the direction that we need to go in.”


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