Tuesday, October 17, 2006

How Dark the Con of Man

I just started to read the DaVinci Code and have to admit it is a great book. I can barely put it down; I have read about 200 pages. “How Dark the Con of Man” seems to be the key phrase so far and I cannot help but wonder if there isn't a parallel between that and the argument for fee only planning. The phrase refers to creating a false picture of reality or history, perhaps hiding the truth and spreading a completely different version.

Don't get me wrong; I am a proponent of fee only planning and I do think that in many cases the consumer is much better served using a fee only planner versus a commissioned planner. I think that having the legal remedy of the Fiduciary Standard of Care is important but at the same time ask "Is it always necessary?"

I was speaking with another fee only planner who likes to toss the term fiduciary around. He was complaining because a broker in town had gotten a small account from a relatively young person. My fiduciary friend was saying.... "He is just a salesman... not a planner". I know the broker and he likes to use "A" shares of a very highly regarded fund family. I use their Advisor class myself. In my mind a 20 something year old comes in and says, "Listen I have 25K to invest long term and I don't really need that money”, then picking a quality growth fund doesn't seem to be doing anyone any harm. The harm may come about later if the consumer thinks that he is having the account managed when he's not, but certainly not in the original purchase.

Not every event in life requires comprehensive planning.


Terri said...

I would think that most people would want a fiduciary relationship but I guess you have a point... its ok sometimes to just roll the dice.

Morris Armstrong CFP, ChFC, CDFA, AIF, EA said...


The fiduciary relationship can be very complex and for many transactions it is ok to use that salesperson. They still have to get the basic info for you and disclose some information.

I have no real issues against commissionable products as long as the service is there. Thank you for your comment.

money said...

nice blog... keep it up