PBS exposes financial industry's hidden truth

I’m not big into TV. For me, its only purpose is to screen classic movies, Buffalo Bills games and the occasional Jeopardy Tournament of Champions. Of course, every now and then some channel will offer an enticing special. For me, “enticing” usually involves at least one of these three components: Any Beatle (living or dead), old time northeastern railroading or William Shatner.

Lately, I’ve found these things most often on Saturday Night Live or The Comedy Channel. But this past weekend, my local PBS station showcased the Beatles’ Magical Mystery Tour as never seen before, at least by me. I was so excited, I turned the channel on a full 10 minutes before the start of the movie. That was a mistake.

As bad luck would have it, I was honored to witness the final few minutes of some financial advice show. At least I think it was financial advice. I’m pretty sure it wasn’t local — it had that antiseptic, syndicated feel to it.

You know what I mean. It’s the kind of format that has an unseen, classy-voiced announcer throw out a factoid or “Did you know…” question in between segments. I tend to ignore these shows as white noise, but my otherwise-engaged mind took notice when the invisible voice asked, “Does Wall Street provide a service or make products?”

My attention caught, I waited as the host spewed some tripe about 529 plans. (“If you don’t spend on your grandkids, spend it on yourself! You can go back to school!” Seriously. This was his advice. He even included the exclamation points.) When he was mercifully done, the voice gave the answer to the question. 

“The business of Wall Street,” the velvet voice said with silky certitude, “is to create and sell product, not to provide a service.”

There, in a nutshell, is the problem faced by all those who advocate a uniform fiduciary standard. “Wall Street” — more appropriately, the financial industry — offers both. Some professionals pitch products and some supply service.

The fiduciary standard applies to advisors, not brokers. Advisors provide a service. Brokers sell products. From the mouth of PBS, perhaps the best proxy we have for urbane sophistication, comes this platitude: Wall Street doesn’t serve, it sells.

So this is what is comes down to: Are we a muppet or a man? Do we sell or do we serve? Shall we accept the suitable or do we have a greater calling to duty? These questions have stirred tremendous discussion within our industry for several years now.

Complicating this is the concept of dual registration, as blessed by the regulators, where we assert we can live and thrive — with no confusion whatsoever — with a professional split-personality. Never claiming we’re one or the other, like a switch we can turn off the broker and turn on the advisor without ever abrogating our fiduciary duty. Some of us, however, maintain we cannot serve two masters.