Advisors who already take pride in their fiduciary status are eager for regulators to make it mandatory industrywide. But who are the people who consider fiduciary practice a burden?
The members of NAIFA -- the National Association of Insurance and Financial Advisors -- have led the countercharge against the universal fiduciary rule.
As they like to point out, they primarily work with smaller accounts under $50,000, owned by clients who make less than $100,000 a year.
These are true "middle class" or even working class clients. To serve this market, these advisors spend an average of close to $9,000 a year on compliance.
If compliance costs go up, NAIFA says its members will have to chase higher-end accounts and abandon the middle market.
The question, of course, is whether NAIFA members have concentrated on small accounts out of some philanthropic impulse, or whether these are simply the only clients they've been able to get.
If it's the former, then NAIFA should say so. But if their members would be happy to work more closely with high-net-worth families -- spending less time with their middle class clientele in the process -- we all need to be clear about that.
Concentrating on a market segment or abandoning it because it just isn't profitable is a business decision. It's that simple.