1. Fewer, if any, conflicts of interest. Wouldn't it be great to have no conflicts of interest to disclose? If you were a client, would you rather have a Financial Advisor who fully discloses her conflicts of interests or a Financial Advisor who does not have any conflicts of interest to disclose? No matter how much your clients trust you now, the relationships shift up to the next level when you take the fiduciary approach. They were always confident you had their best interests at heart and now they know it for certain.
2. Confidence knowing that you have voluntarily chosen to operate at a higher standard than your peers and "competition." What impact would this higher level of confidence have on:
a. your client interactions?
b. your effectiveness in asking for
referrals?
c. your effectiveness in how you follow-up with your referrals?
d. how you answer the question, "what do you do?"
e. your value proposition?
f. your entire way of being in every prospect and client interaction?
g. your effectiveness in partnering with other professionals such as accountants, lawyers, and money managers to serve clients.
3. Employee morale and loyalty. Even in difficult economic times, the core motivators beyond the paycheck determine the true value you gain from your employees. Most human beings would rather be part of an organization that stakes out the higher ethical ground as part of their defined business practices.
4. Compliance simplification. It's very obvious to your internal compliance officers and / or the regulators who are looking for client situations where you have conflicts. When they don't exist there's no reason to spend more time in your office, to keep digging, or engage in endless follow-ups.
What other advantages would you have if you adopted the fiduciary standard?
Maybe it's a good thing for you that so many in the industry still fight the fiduciary standard. As long as they do, individual advisors who adopt the standard have a competitive advantage. Enjoy it while it lasts.
Bill Bachrach, CSP, CPAE is a very popular keynote speaker, best-selling author, and the creator of the Values-Based Financial Planning turnkey business model, which helps advisors create their ideal life in four years or less. Go to www.billbachrach.com to learn more.