Current research has confirmed serious problems with the manner in which Americans receive their financial advice. The financial industry, despite great strides, is still struggling with large numbers unscrupulous advisors. The Fiduciary Rule, set to take effect earlier this year, was designed to alleviate some of these issues. Donald Trump, after taking the presidency, ordered the Department of Labor to reconsider the rule. Lack of support for more regulation and a general concern with potential side-effects by the President is also mirrored in Congress. Given the outlook of the new administration, the adoption of the rule, especially in its original form, is doubtful. Objectively, the rule is certainly not a fix-all solution and its passage does entail some possible negative repercussions. But, regardless of outcome, the financial field remains rife with malcontents and miscreants. The average firm employs around 8% of advisors that have a record of serious misconduct. Of this 8%, nearly half of them keep their jobs even after being caught. Even worse, nearly 38% of the misbehaving advisors go on to do more harm to other clients. Though the Fiduciary Rule may be controversial and uncertain, what is certain is that industry changes must be made in order to repair and sustain an image of professionalism and trust in financial advisors.
See Ben Steverman, Fiduciary Rule Fight Brews While Bad Financial Advisors Multiply, Wealth Management.com, June 7, 2017.
