Marketing The Fiduciary Standard Will Never Work

I make a living helping advisors engage their clients in a strategic way; to create a formal feedback process to take the practice where the clients wanted to go. The purpose is to drive referrals and attract new clients. One principal tool I use is the client advisory board. And I have yet to hear a client in that setting ask about the advisor's status as a fiduciary. In fact, despite articles that assume as fact that adhering to the fiduciary standard is a great differentiator in prospects’ minds, every study I have read so far except one indicates that clients are at best confused, and, at worst, assume everyone is held to it already.
And I likely never will. The whole fiduciary argument is a relatively complex legal concept, and most clients don't understand it. It will not work as a marketing proposition for the same reason that mutual funds do not make headlines of their Sharpe ratio.
What clients want to know is "Will you look out for me? Will you put my interests first?" What broker would answer no to those questions? And when it comes to clients with existing relationships, the public's attitude in this arena is similar to their opinion about health care– the system is lousy, but I love my doctor.
Besides, if we are successful at persuading the regulators to make the fiduciary standard uniform across our industry it will, by definition, cease to be a differentiator.
When I work with advisors to customize their practices for their target clients and create a marketing strategy around that, the most common struggle I have is getting advisors to listen to the clients’ ideas and opinions rather than pursuing their own. We believe it's important that everyone be held to a fiduciary standard, but clients think we already do.
I support the fiduciary standard. I worry how the concept will be diluted and distorted when the big brokerage firms start their lobbying in earnest. Fighting for it is a worthy cause. And it has little value in our marketing plans. Like a lot of things we do to maintain our skills as professionals, it is important, and we will get no marketing mileage out of it.
If you want to differentiate yourself from other practitioners, get out of the echo chamber of our own professional community. Find out from your clients what unique things cause them to choose you over everyone else in our business, and build your marketing strategy around that.

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