You don’t need much of a crystal ball to realize that in the not-too-distant future the fiduciary standard will become the standard of the insurance and financial industry. There is simply no common sense argument that a person who entrusts another with their finances should not be assured that the person with whom they are dealing has their best interests at heart – first and foremost.
Those who do not recognize that this change has a lot of momentum behind it already will be left in the dust, and possibly find themselves out of business. To believe that retail standards for a broker-dealer should be different than for a financial advisor, or that an insurance professional should somehow have a lower level of responsibility to the client than another financial professional, stems from arguments that are either self-serving or misinformed. Moreover, the source of funds issue is far from being tabled and which will also, sooner than later, require insurance professionals to be securities licensed when moving funds from security products to insurance products, and that too will require a fiduciary standard, e.g., becoming an RIA or IAR.
From an industry perspective, introducing a broad based fiduciary requirement will do nothing but elevate our business that currently, in the eyes of the public, is not well thought of. Our data shows that 73 percent of people between the ages of 45–80 do not have trust in financial professionals or the financial industry as a whole. This is a shockingly high number that is most distressing to anyone who takes our industry seriously as a service to help people do better, rather than as a paycheck coming at the end of the month.
Adapt to change