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November 08, 2017 at 11:39 PM
What do Alan Dershowitz and Mark Tibergien share? Dershowitz, the renowned Harvard law professor and Democrat, upset Democrats when he seemed to defend President Donald Trump.
Mark Tibergien, the Pershing Advisor Solutions CEO, is sure to upset many RIAs, as his comments on RIAs suggest in an Oct. 18 discussion I had with him.
Stay with me on this. Each overlooked the unwritten code that values unity over candor. Each spoke out on principles dear to him. For Dershowitz, they underpin civil liberties. For Tibergien, the business of advice. His vision and blueprint for how RIAs evolve and thrive is his passion.
RIAs’ voice in Washington is fragmented and their brand, like the major political parties, unclear, according to Tibergien. RIAs suffer the collateral damage of consumer distrust of banking and finance. One reason people reject entering the RIA business is because they think the industry is “corrupt.” Also, he says RIA standards are too low.
His public comments are tough. Such sharp words usually stay private. When was the last time a widely respected RIA leader similarly commented so pointedly on RIA standards and branding? Recently, ever?
Like ‘em or not, Tibergien’s comments deserve to be heard. Though I have my disagreements, they are thoughtful and pertinent. What’s more important for a profession in development than standards and branding? Here are some key excerpts from the interview:
On Advice vs. Sales
The industry and regulators share responsibility for allowing “confusion in terminology” on brokers and advisors, Tibergien says. In other professions, there are clear distinctions in education, training and codes of conduct. “That’s missing in our business,” he says. “If you begin with the premise, ‘Your job is a salesperson,’ then the nature of regulation will be different than if I said ‘Your job is as a fiduciary client advocate.’”
Product distributors are the “great influencers.” Still, “the RIA community has to try to influence the conversation if not the regulations. There are many fragmented groups … It sort of feels like both major political parties. We don’t know exactly what they stand for today.
“The opportunity is to change the conversation, … promote the idea that there is a difference, but not as a pejorative, more as a distinction. I would prefer to see the conversation … about clarity and transparency.”
Credentials and Training
“The RIA community has not been subjected to any kind of rigorous regulation from an individual practitioner standpoint,” Tibergien argues.
“I’m not sure that once people are hired into advisory firms then they are being credentialed and developed and trained [like] … the legal profession or the medical profession or the accounting profession. I don’t think [it’s] part of the continuing education of most people in this business. I think it is incumbent upon the profession to raise the standards.”
