Likelihood Of Confusion

“In law, a person in a position of authority whom the law obligates to act solely on behalf of the person he or she represents and in good faith. Examples of fiduciaries are agents, executors, trustees, guardians, and officers of corporations. Unlike people in ordinary business relationships, fiduciaries may not seek personal benefit from their transactions with those they represent.”

This business of “fiduciary” is simply not that hard to grasp. If we ask for trust and confidence, we need to live it and earn it. This renders deception unacceptable, intolerable and beyond the pale. This doesn’t mean we can’t make money within the context of a financial planning relationship. It doesn’t even mean we can’t sell appropriate financial products. It just means we have to work within the bounds of trust and confidence—for real—no hat dances permitted.

A reasonable test involves thinking of your mother. Would you want her to know how you have treated your client? Or how would you feel if someone treated your mother as you have treated a particular client who has trusted you implicitly?

The CFP Board says it “aspires” to a uniform fiduciary standard. Yet we all know that “financial planning” is being used more for sales than advice by too, too many of our fellow CFP licensees.

Frankly, I don’t think any of these terms are particularly ambiguous or hard to grasp. I just don’t find much common ground between the terms “advice” and “sales.”

At the end of the day, “CFP” must stand unambiguously as both the trademark and hallmark of fiduciary advice. Understanding that financial planners are neither angels nor saints, the client must have the unassailable confidence that his CFP advisor can be trusted to serve his interests first and ahead of any others, including those of employers or monthly sales quotas.

This issue of confusion is a very big deal. Confusion is bad for professions aspiring to be perceived as authentic. Somewhere in here is the essence of confusion and blown branding.

If financial planning is to achieve the stature of an authentic profession, we must define its mission and purpose in the contexts of our fiduciary relationships and accept the responsibilities implicit in an authentic advisory profession. No confusion allowed.