In a recent wide-ranging interview with AdvisorOne, two of the top executives at the Financial Planning Association (FPA), Marv Tuttle, executive director and CEO, and Paul Auslander, FPA’s president, talked about the top issues facing advisors.
They focused on the SEC’s attempts to put brokers under a fiduciary mandate, the aging of the profession and its lack of diversity, the importance of practice management and succession planning, as well as how the younger generation of planners hold the key to moving the industry forward.
Regarding whether the Securities and Exchange Commission’s attempts to write a fiduciary rule will eventually be unveiled, Auslander says he’s confident that the train has “already left the station;” now “it’s just how it applies.” SEC Chairwoman Mary Schapiro has said she is hopeful the SEC can release a fiduciary duty proposal this year.
Says Auslander: the debate now is “how [a fiduciary duty for advice givers] is going to be applied—and there are many different iterations.”
A fiduciary duty “for all business models is the big challenge, but I think we can get it right,” Auslander said. “At the end of the day, [serving in a fiduciary capacity] is compensation neutral. You can be a fiduciary if you’re a commission broker or a fee-only planner. All forms of the profession have a potential for conflict.”
Both Auslander and Tuttle agreed that two pressing issues for the industry are practice management and succession planning. The FPA, Tuttle said, is putting “a greater focus on practice management, from A to Z” as well as how succession planning plays into that. Tuttle said an area where FPA “can excel” is in practice and business management. “That’s where we’re spending a lot of time to put some shape to being a go-to resource for financial planners and maybe others that can benefit from a professional standards standpoint.”