Fiduciary Commitment and Why It Matters

Strong Fiduciary Commitment – Why It Matters to Both Investment Firms and Investors

In a sad follow-up to my last post, it seems like the somewhat two-faced arguments of the investment industry have for now, won the regulatory day.

The Department of Labor (DOL) has announced it is delaying implementation of a new set of retirement plan investor protection rules that were designed to make sure firms were more transparent about  their conflicts and that investment advisers and brokers put client interests first.

Some might suggest that two-faced is too strong a term, but click here to see some of the many contradictory statements made by the industry, such as the ones illustrated at the top of this post.  Then let me know what you think.

Unfortunately, I think many in the investment industry have protested too much to the detriment of both themselves and the investing public.

As I recently wrote for the CFA Institute, a lot of contentious debate has occurred, and should at this point continue, about who is a true fiduciary and who is committed to putting the interests of clients first.

Why should this matter to you and why should the industry be just as deeply concerned?

Maybe the following findings from a recent CFA survey of over 200 investment management leaders and approximately 3,300 investment professionals help drive home the point:

  • Only 28% of respondents report staying in the investment industry to help clients.
  • Another 36% believe that acting in their clients’ best interests implies taking on career risk.

With responses like this, it is clear that the investment industry has a problem.

I hope fiduciary rules come that will help the industry act more in the interest of clients, but regardless, I think an easy, one word solution exists:  transparency.

The industry should stop protesting simple, plain-language disclosures of conflicts. Every organization is capable of making them.

Investors should help drive this change by remembering that investment firms are not altruistic by nature.  Caveat investor is my spin on a maxim that’s a very old one for a reason.

If the problem of conflicts is tackled by both the supply side (investment firms) and demand side (investors), positive change will come and start to reverse the following:

  • Only 11% of investment management leaders describe the impact of the investment industry as positive for society*

In the meantime, my firm and a few others are making an even stronger commitment to put clients’ best interests by committing to what we view as strong fiduciary standards (please click here to find out more).  I hope others will follow.


* From a recent survey of 1,145 [investment] industry leaders conducted by the CFA Institute. The complete white paper and findings can be found by clicking here.


During the week, Preston McSwain is a Managing Partner and Founder of Fiduciary Wealth Partners, an SEC registered investment advisor. Every day he is a proud Dad and committed to giving back.

To see more of his posts, and follow him on social media, please visit the following:


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