Bob Veres strikes an unusual pose at financial planning conferences, his beard and pony-tail being more avant-garde than typical attendees.
Despite his unconventional veneer, Veres has iconic stature among financial planners and does industry commentary-in person, in print or online. He recently fired a shot at the financial services/retirement cabal, labeling them “financial terrorists” for their dogged opposition to fiduciary standards.
Anyone living and working in South Walton knows all too well about financial terrorism but that’s another day’s story.
According to testimony at the Security and Exchange Commission’s website, all the heavy hitters, insurance companies, big brokers and banks remain foursquare against a fiduciary standard for their clients. Veres dismisses their argument likening them to clumsy hostage takers and bumbling blackmailers. But Bob is much too serious and misses the comedy.
These industry big-shots claim a fiduciary standard will mean a reduction in the number and types of products offered to people with investable assets less than $250,000. Newsflash: Most Americans have much less than $250,000 to invest. It’s got to be a joke, right? Variable annuities will still be sold for less than $250,000. Who’s kidding who? Maybe with a fiduciary standard, the salesperson couldn’t claim annuities were commission free or mislead about annual costs.
Last month, the Washington, D.C., Theater of the Absurd topped itself.
A liberal group signed, sealed and delivered a letter to the Securities and Exchange Commission. As members of the Black Congressional Caucus, they were ostensibly worried a fiduciary standard would disproportionately affect black constituents and their ability to save.
Thanks to the magic of modern technology, inquiring minds discovered a financial services industry lobbyist drafted said epistle. Then said industry lobbied the Securities and Exchange Commission citing in part the letter signed by the congresswomen and men. Thank you, Maxine Waters for this bit of levity. LOL, the fiduciary standard debate allows me to scoop my First Facebook Friend Ever, Ron Hart, on a liberal licentiousness story.
The argument against a fiduciary standard further disintegrates when you see other countries incorporating it for investors.
Both Britain and Australia have implemented a fiduciary standard. We speak the same language (similar anyway) and all three of our court systems follow English Common Law. The London Stock Exchange traces its lineage to the Royal Exchange founded by Queen Elizabeth I in 1571.
They’ve been dancing the capitalism jig for centuries, long before we were a nation. It’s not like they are singing Karl Marx hallelujahs. A fiduciary standard is merely an evolutionary offshoot of the crescent of prosperity springing from Genoa, Italy, to Great Britain and its former colonies.
A fiduciary standard means nothing if practitioners ignore it. Asset managers, posing as fiduciaries, sometimes recommend taking Social Security before full retirement age, resulting in asset management fees for them and eliminating the seven percent annual increase in Social Security benefits for their clients.
Fee-only fiduciary planners routinely charge asset management fees on qualified plans — 401(k)s for instance, they only manage from afar. Charging full fare on limited options inside a qualified plan seems a fiduciary reach. Conversely, I’ve worked with non-fiduciary investment professionals who practice as fiduciaries because it’s the right thing to do.
With a fiduciary standard nothing changes for anyone who walks the walk.
Buz Livingston, CFP, has the only investment management and financial planning firm in the entire world headquartered in Blue Mountain Beach. Contact him at 850-267-1068 or www.livingstonfinancial.net