The death of the fiduciary rule, as reported in The New York Times, is terrible for investors.  The rule required financial professionals of retirement accounts to put the interest of their clients ahead of their own.  Why an investor —  in a retirement account or otherwise — would choose to rely on someone who didn’t adhere to this basic standard has mystified me and others for many years.

The defeat of this common sense rule is a victory for Wall Street and a testament to the enormous power of its lobby.  Someone once told me the securities industry “has equity in Congress.”  This sorry episode makes me a believer.

Just because Congress doesn’t haven’t the political will to protect investors doesn’t mean you can’t step up and fill the void.

Creative education

Wall Street has done an excellent job of avoiding this issue and blowing smoke to confuse investors.  The response of many registered investment advisors (all of whom are legally obligated to put the interest of their clients first) has been to engage in a dry discussion of the merits of a “fiduciary” relationship and contrast it with the lower “suitability” standard, applicable to brokers.  This strategy hasn’t worked.  It’s time to get creative.

I see this as a massive marketing opportunity.  Here are some ways to exploit it:

1. Do a video. Explain the difference between these two standards. Done right, it will be obvious that relying on someone who can hide conflicts of interest, and resolve them against the client, makes absolutely no sense. Consider using humor. It can be a powerful tool. Think out-of-the box, like interviews with investors asking if they know the difference. How about something tongue-in-cheek, like this video that’s been viewed over 16 million times!
2. Take the gloves off. Write a blog giving real-world examples of how investors are harmed by brokers who adhere to the suitability standard. Don’t be polite or politically correct. This is both a scandal and a scam. Call it like it is.
3. Join with others. Together, you’re stronger than you are dealing with this issue on your own. If you are in a LinkedIn or other group of like minded advisors, consider pooling your resources and creating videos, blogs, brochures and other materials you can brand with your firm’s logos and white label.
4. Keep it professional. You in front of a green screen won’t cut it. You want a product with high production content, excellent lighting, and perfect audio. There are many resources available to you, including our digital marketing firm.

Seize the moment

Don’t despair.  Yes, it’s sad the government won’t protect investors, but you will.  Seize this moment as a once-in-a-lifetime marketing opportunity.

Resource of the week

This article in The New York Times chronicles the death of the fiduciary rule.