As the industry struggles with expanding the definition of who is subject to a Fiduciary Standard, Donald Trone, a long time fiduciary advocate argues that creating a "Uniform Fiduciary Standard" will lead to the opposite of its intended purpose, it will institutionalize mediocrity. Trone says:
Most decision-makers fall into the advisor/trustee ranges, and for this group, a uniform fiduciary standard will make sense. However, when we consider the unique attributes of a steward, it’s clear that a uniform fiduciary standard will have the effect of institutionalizing mediocrity.
Trone leaves us with this parting thought:
The leaders of the fiduciary movement have centered their debate around a principle: “The best interests of the client.” Principles appear at the top of the pyramid. In contrast, the broker-dealer community has argued for a harmonization of rules—the lower portion of the pyramid. As it stands today, it appears that the broker-dealer community is going to prevail. If so, at some point in the future we will have a uniform fiduciary standard consisting largely of rules, and the uniform standard will fall within the lower portion of the governance hierarchy. There will be a significant gap between the uniform fiduciary standard and what we refer to as stewardship. There will no longer be a progression between professional standards; there will be the masses who are subject to a uniform fiduciary standard and the industry elite who will voluntarily adopt the higher stewardship standard.
I encourage you to read the full article at Financial Advisor Magazine titled "Uniformity = Mediocrity."
Scott Dauenhauer, CFP, MSFP, AIF