In the first part of the post, we looked at the Sullivan/Northstar results on fees. In this part, we’ll look at the results on fiduciary, as well as whether or not a focus on fees and fiduciary is bad marketing.
In the same manner that “fee-based” was negative in the results of the study, doen by the brand engagement firm Sullivan and the market research consultancy Northstar Research Partners, “fiduciary” was just downright confusing. In fact, its 40% “confusing” response rate made it the second most confusing word or phrase of the study, just behind “life stage” at 41% and more confusing than “dollar cost averaging” at only 38%, as well as other common (but apparently confusing) planning words like “concentrated” (35%) and “legacy” (33%).
That the fiduciary concept is confusing for the public probably isn’t entirely news—many studies in recent years, including especially the RAND study, as well as the ongoing struggles of both the industry and the media to explain the value and importance of the fiduciary duty—speaks to the lack of consumer understanding about what the fuss for “fiduciary” is really all about.
But the fact that it’s actually one of the most confusing words we can use—in a world where most people don’t like industry jargon and language they don’t understand—implies that frequently talking about fiduciary could actually reduce trust with prospective clients, who are more likely to find you uncomfortable and untrustworthy for using jargon and talking over their heads, rather than being more trustworthy by virtue of your fiduciary duty.
And of course, in many situations, we as professionals then proceed to make the situation worse by trying to explain fiduciary, which as I’ve noted previously on this blog usually comes out less like explaining to the prospective client why you are good, and more like explaining why everyone else is bad… even though most people are clear that they don’t like to work with professionals who bash their competition.
Is A Focus On Fees And Fiduciary Bad Marketing?