The consulting process is of immense importance because it is client-centric. The raw delivery of a product [like the stand-alone MDP] does not solve client problems, set client goals or establish client expectations. As such, it is unreasonable to expect that the MDP will deliver a 30-year retirement, or put a child through college or pay for a wedding. When an investment is a stand-alone product, it is understandable that it would have to be sold, especially to unsuspecting or undiscriminating investors-it's just a weaker form of Lotto.
von Borstel: Well said, Tom. If it isn't an outright easy way out, it certainly paves the way to being one. I think some advisors are looking for a way that they really don't have to invest the time and effort in the consultation and decision process for clients-the guts of what this profession is really all about. The current fiduciary liability atmosphere only serves to exaggerate that tendency. It's a lot easier to blame the sponsor of an MDP who's running the entire portfolio, right? That being said, some clients who have a large enough portfolio and can perceive the potential benefit of having an MDA-type platform integrated into the rest of what we're doing, I find using it for about one-third of their portfolio can make sense.
FA: Thank you, gentlemen, for sharing your insight.