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Why We Should “Run” from the SEC’s Mary Schapiro
By Dr. David Edward Marcinko MBA CMP™
[Publisher-in-Chief]
OK, I’ve opined about fiduciary accountability for stock brokers, FAs and FPs – as well as Mary Schapiro [Chairman of the SEC] before – on this ME-P. And usually, in not so glowing terms!
But now, Mary really chaps my ethical and linguistic sensibilities.
Why I’m So P…… Off!
According to Bloomberg, and Advisor One [a financial services industry trade magazine], the chairwoman is considering something called the “business model neutral” rule that retains proprietary financial products, and brokerage sales commissions.
This concept of ‘business neutral’ is the one sought by many in the brokerage and insurance industry in order to redefine the term ‘fiduciary’ as an enhanced form of ‘suitability’ with opt-out provisions.
But, it is not sought by me, and should not be accepted by physicians.
Definitions
Suitability Rule – According to the Free Dictionary:
A stated or implied requirement by a regulatory body that a broker or investment adviser must reasonably believe that a certain investment decision will benefit a client before making a recommendation to him/her. That is, the broker or investment adviser must act in good faith, and may not knowingly recommend bad investments. Different regulators and self-regulating organizations incorporate suitable rules in different places in their bylaws. Two commonly referenced suitability rules are Rule 2310 for the Financial Industry Regulatory Authority and Rule 405 for the NYSE. See also: Due diligence, Prudent-person rule, Twisting.
Fiduciary Rule – According to the Free Dictionary:
A uniform standard for financial advisors that requires them to put retail customer interests ahead of their own financial interests.
This is clearly a higher duty [level of care] than suitability. Insurance agents, stock brokers, BDs and most “financial advisors” hate it.
Link: http://www.advisorone.com/2011/12/09/reaction-to-schapiro-comments-on-fiduciary-rule-ar?ref=hp
“Suitability on Steroids”
Some pundits suggest we think of this new “business model neutral” rule as “suitability on steroids.”
However, as most of us in medicine know, steroids are not a panacea and are typically used as a quick fix for short term gain, only.
Otherwise, the excessive use of anabolic steroids is bad for our physical health. Just like Mary Schapiro is bad for our fiscal health. But, a Certified Medical Planner™ is a fiduciary at all times http://www.CertifiedMedicalPlanner.org
More: Enter the CMPs
Assessment
And so, your thoughts and comments on this ME-P are appreciated. I was an insurance agent and certified financial planner for almost 15 years [Series 7, 63 and 65] before I resigned all – in disgust over the fiduciary flap.
Doctors are fiduciaries. I am a fiduciary, a doctor, and a financial advisor. Shouldn’t all physician-investors demand same from their own financial advisors [NASD-FINRA, RIAs, RIA-Reps]?
But hey – I’m just a medical provider.
Conclusion
Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.
Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com
OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:
- PRACTICES: www.BusinessofMedicalPractice.com
- HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
- CLINICS: http://www.crcpress.com/product/isbn/9781439879900
- ADVISORS: www.CertifiedMedicalPlanner.org
- FINANCE: Financial Planning for Physicians and Advisors
- INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
- Dictionary of Health Economics and Finance
- Dictionary of Health Information Technology and Security
- Dictionary of Health Insurance and Managed Care
Front Matter with Foreword by Jason Dyken MD MBA
[BY DOCTORS – FOR DOCTORS – PEER REVIEWED – NICHE FOCUSED]
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Filed under: CMP Program, Ethics, Glossary Terms, Investing, Op-Editorials | Tagged: certified financial planner, certified medical planner, CFP, CMP, david marcinko, fiduciary, financial advisors, FINRA, Mary Schapiro, NASD, RIA, suitability rule, www.certifiedmedicalplanner.com | 17 Comments »
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