The SEC’s decision to require RIAs to disclose Paycheck Protection Program loans has unleashed something of a brouhaha within the profession. Some advisors sought to shame rivals who took loans, arguing it was a sign of poor financial management, a bit like the accountant who can’t file his taxes.

Advisors’ first duty is to be there to service their clients, particularly in times of crisis. By any definition, the pandemic qualifies as a crisis.

Most RIAs I’ve spoken with in recent months have been working overtime, as have their staffs. Some have encountered new unforeseen expenses, like new software and more powerful computer equipment, so all employees could meet and perform their tasks virtually.

In addition, there is the old piece of advice for air travelers that they should put on their own oxygen masks before trying to help others. So advisors likely wanted to make sure their own firms were financially sound so they would have the psychological confidence to address clients who were anxious and fearful. So far so good.

But there is, of course, another point of view. RIAs are financial professionals. One of their key services is to prepare individuals who aren’t especially sophisticated through turbulent times and guide them through recessions and market volatility.

Maintaining a rainy day fund is a major tenet of financial planning, one of the first recommendations many RIAs offer to clients. So one would expect that a well-run RIA firm should be positioned to withstand a 34% bear market that was over in less than three months, correct?

The reality is that when PPP loans became available, many feared that a 34% bear market could turn into 54%. After all, the speed and depth of this recession were nothing like anyone had ever seen or read about in the history books. Nor did most RIAs expect that the SEC would require them to disclose the loans.

Our Washington editor Tracey Longo contacted Ritholtz Wealth Management’s co-CEO Josh Brown, who told her it was “nobody’s business,” and then politely answered her questions. Given some of the strings attached to the loans, it’s likely that most RIAs will pay them off rather than seek forgiveness.

Brown wasn't the only RIA to offer no apologies taking a PPP loan, which Ritholtz subsequently repaid.

Elissa Buie of Yeske Buie in San Francisco told our senior editor Eric Rasmussen that she stands by the decision with full conviction (she says she even went with mask and hand sanitizer to Rep. Nancy Pelosi’s office in San Francisco to lobby for such help).

“I will not apologize," Buie says. "We don’t run on 50% margins. Firms like ours could charge more and have bigger margins, but we don’t. Because we charge what is the market rate and we hire the appropriate number of skilled people to do the work. Our revenue drop would be really difficult for us to deal with.”

Of course, there’s another story here. Many RIAs had clients whose businesses were locked down for several months and were struggling to survive. Many badly needed PPP loans and more than a few received help from their advisors in obtaining the funds.

When this is all over, the subject of PPP assistance will remain contentious. The guess here is that both RIAs and their clients will want to keep a little more cash in reserve in the future. Then again, with $5 trillion sitting in money market funds and other vehicles yielding practically zero, many have already taken that message to heart.

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