12.2.2009 According to a survey recently conducted by the SEI Advisor Network and the Committee for the Fiduciary Standard, a strong majority of brokers and advisors support and understand key elements of the fiduciary standard. The survey was completed by 890 Registered Independent Advisors (RIAs), Investment Adviser Representatives (IARs) and dually registered broker/advisors, in October and November 2009, with assets under management ranging from less than US $50 million to more than US $250 million. Respondents self-identified their compensation structures as the following: commission (132); commission-fee (510); and, fee-based and fee-only (242). These three categories translate into two groups: brokers (commission brokers and commission-fee brokers) and advisors (fee-based and fee-only).
The poll was conducted with the goal of determining the level of support and understanding of the fiduciary standard among financial advisors and brokers. More than half (53%) of brokers believe that “all financial professionals who give investment and financial advice should be required to meet the fiduciary standard.” Additionally, of the brokers who responded to the survey, only 27% disagree that all professionals who give advice should be required to meet the fiduciary standard; and nearly one-fifth (19%) said they are undecided. Of the financial advisors (fee-based and fee only) who participated in the survey, the support for the standard is very strong as 86% agree, 10% disagree and only 3% are undecided.
Among the two groups of poll participants—advisors and brokers—understanding remains equally high on key elements of the fiduciary standard. More than three-quarters (80%) of brokers said they understand the standard either “fairly well” or “very well.” Nearly all (98%) of the advisors surveyed said they understand the standard “fairly well” or “very well.”
While advisors and brokers polled in the survey agree on many key issues, disparities exist between their views on some topics. These issues include whether modifications to the standard should be made to better fit brokers selling activities, whether switching to the suitability standard should be allowed when products are sold, and how investors view compensation methods. Additionally, there is a split within the brokerage community—commission-only brokers versus commission-fee brokers—on these first two issues.
Click http://www.seic.com/enUS/about/2760.htm to access the release. Click http://www.seic.com/Advisors/SEI_AdvisorNetwork_FiduciaryStandardReport.pdf to access the results of the survey.