They are ubiquitous. They are in every interaction… in every human relationship… in every transaction. We can’t name them all. They aren’t even all bad, but it is good to know they are there as they are often invisible until someone shines a bright light on them.
Facebook is having its moment in the spotlight for its failure to balance the conflicts between its users and the advertisers that make it profitable.
Investment Banking had a moment after the dot.com debacle and then another moment (along with lenders (and surrounding bank services) in 2008’s Great Recession.
Pharmaceuticals had a moment with Martin Shkreli.
#Metoo is, at least partially, a conflict of interest issue.
And, where do we even begin when it comes to the Trump Presidency?
Conflicts of interest are literally EVERYWHERE… but few conflicts are as heavily debated as those found in the financial services world. Why?
Upton Sinclair said it best:
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
Google “the Merrill rule” and you will see a long history of “brokers” trying to pass themselves off as having a fiduciary responsibility (for marketing purposes) without actually committing to one.
For those of you that don’t know, a “Fiduciary” is someone who owes another party the duties of good faith and trust. In a nutshell, it means that one person has the duty to act in the other person’s best interests. It is the highest legal duty that one can have to another.
We have been 98-99% fiduciary for a long, long time. I have always understood that we would one day be 100% fiduciary. Today, 3/29/2018, is that day.
Does this eliminate conflict? No. Nothing can do that.
The fiduciary duties are the next best thing. This is the highest commitment I can make to my clients. While I am happy the intention has always been there, I am happier still to formalize it.
Thank you to Nancy for moving mountains to bring the whole transition about, to my team for the early mornings and late evenings. And thank you to our wonderful clients for your continued trust and… for turning your paperwork around so quickly.