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Wealth Professional | 25 May 2016, 08:15 AM Agree 0
Is the conflict of interest really down to the advisors themselves – or is it a problem with the system?
  • commenter | 25 May 2016, 11:54 AM Agree 0
    In simple terms, Corporations don't care about the public. its all about the MONEY!!! Screw the public.
  • Frank | 25 May 2016, 12:19 PM Agree 0
    Advisors should be treated "innocent until proven guilty" not vice versa. A greed advisor can be spotted a mile away
  • Russ | 25 May 2016, 01:47 PM Agree 0
    Ultimately, this explanation, 1. confirms the necessity of implementing a fiduciary standard in order to counter the systemic conflicts of interest inherent in the industry, and 2. underlines the reason for the rise of the fee-only independent financial planner and the low-cost so-called "robo-advisor."
  • Brian | 25 May 2016, 02:51 PM Agree 0
    The whole article leads to one conclusion.... "A FEW" are not doing what's best for the client... That means MOST are doing a great job for their clients!!!!!
    "Punish everyone for the acts of a few bad apples"!!!! REALLY!
    It should be also put into context, in Canada:
    - there are about 450 fee only advisors in Canada.... 10s of thousand commissioned Advisors
    - Bank Advisors/Tellers are instructed by the Banks to Cross sell other bank products... often receiving Bonuses (i.e. commissions).
    - MOST Advisors may incorporate other products (if licenced) into the client's Plan IF the product warrants it.

    Also, I believe it is the Newer advisors that may be forced to not do a complete proper job for a client because:
    - lack of good training
    - lack of experience
    - Quotas/Personal Goals, not only to meet Corporate requirements, but also to produce enough income to stay in business and not have to declare Bankruptcy. The horrible Success rate in new Advisors may be the reason for the article's stated issues.
  • Declan, article author | 25 May 2016, 03:17 PM Agree 0
    @ commenter on 2016-05-25 11:54:24 AM - I can feel the strong sentiments in your feedback. Thanks for posting. The way I see it, corporations, like governments are not separate from the public, rather both are formed by members of the public - people like you and me. People like you and me help corporations do positive things like help our neighbours get through the Fort McMurray wildfire disaster, for example. And, yes, profitability is a consequence of doing business however people like you and me, as shareholders, have a voice to direct where some of that profit should go. We can lead the change we wish to see in the world. It won't be easy, as nothing worth changing for ever came easy.
  • Declan, article author | 25 May 2016, 04:14 PM Agree 0
    @ Russ on 2016-05-25 1:47:26 PM - Thanks for your post. As we continue to think through this opportunity to mitigate conflict of interest for clients, consider that fiduciary standards have been instituted by licensing bodies. For example, the Principles & Rules of Integrity & Objectivity within the FPSC Code of Ethics might perceivably be compromised considering that a significant percentage of CFPs work within institutions who mandate product sales. Lots for us all to think about, but we'll get there.
  • Ryan | 26 May 2016, 12:21 PM Agree 0
    I believe Independence is important. I can understand the balance between meeting corporate targets and keeping the clients best interest at the forefront, especially when motivated to 'upsell' within a larger corporate environment. However, I believe the ultimate goal is to serve clients over decades opposed to meeting shorter-term targets. That means its imperative to serve clients in THEIR interest and build their Trust and Confidence over time. I believe at that point, clients are properly served and corporate stakeholders appeased.
  • Daniel | 26 May 2016, 01:38 PM Agree 0
    A great article which points out some of the potential for conflict of interest, but not the absolute reality of it. Yes, some corporations are misguided in their sales reach and goals - the credit card one is a great example. But great financial advisors always have - and always will - overcome these drawbacks.

    Secondly, the CRM changes are a step in the right direction - a big one, but as Mr. Ramsaran correctly points out - there are 'loopholes.' The investor / advisor world is heading towards a fully disclosed fee for service model. The enlightened advisor / mentor has long grasped this fact. Great article !
  • Daniel | 26 May 2016, 01:48 PM Agree 0
    Great article, points out the potential for conflict. I liked the example of the credit card.

    I hold in high regard advisors who are able to move past the temptation - and often as Declan points out - the requirement to sell unwarranted items.

    Great advisors need to be recognized for their fine work as well
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