A Phony Argument

Because advice is client focused rather than product focused, and because we are addressing and managing investment and administraive values (essential to the client's success) rather than selling investment products, advice is faster, better and cheaper than transactions. Thus, the transactions industry (brokerage/insurance)advance a false choice. They do not understand the extraordinary innovations made in portfolio construction and management that can deliver a far superior client specific portfolio for a fraction of the cost of a mutual fund with far superior results and no investment minimum. It is what you do with investment products or process that adds the value, not products in and of themselvers. Client service is not at all limited to only those with a quarter of a million to invest.By any metric, a transactions approach in serving clients is a disservice to the consumer and the industry. It just requires a little know how which the transactions industry finds terribly disruptive, which is in fact why it is so easy to compete with a brokerage/insurance format.SCW

The narrowing of financial advice to mere investment selection for the mass affluent is disappointing. Hourly rates of advisors are where they are because of the need for continuing education to stay current and competent. But, the actual cost of advice can be less than either example given. A simple allocation model and fund selection without a ten hour financial plan will suffice for most families. The advice subsidy of product manufacturers has kept objective advice at bay long enough. Objective, independent advice, unsubsidized, can now be the rule. Economies of scale and more efficient practice management models can bring the price of advice down. If responsible people in the profession begin to act as if a fiduciary standard is the required minimum standard now, without waiting for regulatory authority to force compliance, we will live up to our professional ethics.