Tuesday, December 8, 2009
The SEI Advisor Network and The Committee for the Fiduciary Standard recently conducted a survey of financial advisers and brokers to determine the level of support and understanding of the fiduciary standard. The survey was completed by 890 RIAs, IARs and registered broker-dealers, who self-identified their compensation structures as follows: commission (132), commission-fee (510) and fee-based and fee-only (242). The findings include:
A majority of brokers (53%) believe that "all financial professionals who give investment and financial advice should be required to meet the fiduciary standard;" twenty-seven percent disagree with the statement. Among those who identified themselves as fee-based and fee-only advisers, 86% agreed with the statement.
Eighty percent of brokers stated that they understood the fiduciary standard either "fairly well" or "very well." Nearly all (98%) of advisers stated they understand the standard "fairly well" or "very well."
Respondents were asked if they believed that they should be allowed to meet a fiduciary standard in providing advice and then revert to a suitability standard when recommending products. Ninety-three percent of fee-based and fee-only advisers disagreed with that statement, as did fifty-five percent of commission-fee brokers. In contrast, thirty-seven percent of commission-only brokers disagreed with that statement.
As to compensation, fifteen percent of advisers said that they believe investors do not care how they are compensated, in contrast to fifty-six percent of commission-fee brokers and sixty-three percent of commission-only brokers.