The top spokesperson for the CFP Board is not a fan of broker-driven debate over whether the fidicuary standard will force smaller investors to manage their own accounts.
The idea is "completely fallacious," Marilyn Mohrman-Gillis, head of the planner certification group's public policy team, told people at the Financial Planning Association's recent San Diego conference.
Brokers have argued that if they have to act in their clients' best interests, they will probably end up dumping their smaller accounts because the will no longer be able to generate enough commissions on those assets to make them worthwhile.
As Mohrman-Gillis points out, that argument has logical laws.
For one thing, a fiduciary standard won't prevent these advisors from selling proprietary products or -- except in retirement accounts -- taking commissions.
In that case, these advisors could happily go on selling in-house funds and getting paid by the distributor or their own parent company.
For another, it remains to be seen just how many advisors who currently work with "mass affluent" and smaller accounts would need to leave the market. These advisors may not be happy to work under a stricter set of rules, but that's not the issue.
Finally, although it's not a big factor in published reports of Mohrman-Gillis' comments, broader choice isn't always a great thing. If these advisors are willing to jump just because the government's going to make them work in their clients' best interest, what does that say about their business approach before?
Are these the best advisors to handle America's smallest accounts? Is their service better than nothing? Is it worth the cost?
Is the answer to these questions "probably not?"