As the founder of the Foundation For Fiduciary Studies, Don Trone developed the Accredited Investment Fiduciary (AIF) designation in 1999 to help define the fiduciary role for financial advisors. But with a uniform fiduciary standard of care on the horizon for the industry, Trone has developed a new standard he says will help define how that standard should function.
The Global Fiduciary Strategist (GFS) designation aims to provide academic coursework and focused training for the thousands of advisors who will likely be governed by a uniform fiduciary standard in the near future. Section 913 of the Dodd-Frank Act mandated the Securities and Exchange Commission to study the effectiveness of current standards of care for providing personal investment advice, and in January the SEC staff recommended adopting a uniform fiduciary standard for brokers and advisors that would be no less stringent than the standard currently applied to investment advisors under Investment Advisers Act.
How a uniform standard will work or what it will look like is another matter, but leading officials across the industry support the notion and evidently its time has come. Trone sees that as both good-and potentially not so good-news, the latter being the case if the new standard is watered down to become fiduciary lite.
"My concern with the uniform standard of care is that will have a lot of limitations put on it by Wall Street," Trone says. "It will go from the gold standard to the bronze standard. For the past ten to 15 years the difference between good and great advisors often has been defined in terms of the fiduciary standard of care. When everybody starts calling themselves a fiduciary, there will no longer be a line of demarcation."
Hence, the GFS designation, which Trone says will be more vigorous than current fiduciary designations. That includes the AIF that he developed while at the Foundation For Fiduciary Studies. He left the organization in 2008, and earlier this year sold his shares back to the company. These days, he's the one-man gang behind 3ethos, a Mystic, Conn.-based entity dedicated to fiduciary training and promulgating the GFS designation.
Training for the GFS will have two phases. The first will be built around a core curriculum that will lead to an academic certification in fiduciary studies to be a awarded by what he says is one of the leading graduate schools in the world. Trone says he'll release the name of that institution next week.
With certification in pocket, the next step is to take eight elective courses in one of six practice areas: wealth management; retirement planning; financial planning; health care and special needs planning; insurance planning; and trusteeship work with foundations and endowments. Participants will be able to complete their coursework either online or at one of the designated campuses that Trone says will be announced as the agreements are finalized.
New Elements
The AIF designation, Trone says, focuses on the role of the fiduciary that is based on requirements defined by law, regulations and case law. The GFS designation won't forsake that training, but will add to that an emphasis on the function of fiduciary tied to leadership behavior and the decision-making process.
Trone says those latter two aspects were inspired in part by his 18-month sabbatical during the period of 2007 through 2009 to lead the newly established Institute of Leadership at the U.S. Coast Guard Academy, his alma mater. One of the projects undertaken there looked at why the Coast Guard was successful in responding to Hurricane Katrina when other government agencies failed.
"The Coast Guard got it right because of "ethos," says Trone, explaining that ethos is a Greek word meaning the continuum between a person's or an organization's leadership behaviors, core values and decision-making process.