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Fee Disclosure and Why Financial Advisers Should Be More Like Athletes

By Dan Candura, CFP, United States

With all the controversy surrounding the use of performance enhancing drugs by professional athletes, it would seem strange to advocate that financial advisers should emulate them. I certainly don’t suggest that our profession take on the “win at any cost” mentality that pervades sports. But, there is one area where I think the practices of sports teams can help our profession.

I reached this conclusion when my son sent me this photograph of two European ice hockey players.

Like NASCAR drivers in the US, the uniforms these athletes wear carry the names of their sponsors. There is hardly any room left to identify the skater’s numbers!

But there is also no doubt about who is paying for these players to take the ice.

Wouldn’t it be nice if consumers enjoyed the same kind of disclosure when they sat with their financial adviser? Instead of the sincere, dark suit, advisers would have to wear the logos of all of the financial firms who pay them to distribute products and services. Of course, size and placement of logos would be proportionate to the amount of compensation the adviser earned from each vendor.  Some would get the coveted center chest or arm positions while others would be delegated to a small logo on the advisors socks. I envision the kind of hats worn by cyclists emblazoned with company logos. I suppose some advisers would need to change these caps several times during client meetings in order to accommodate all of their sponsors.

There would be a two-fold benefit as consumers could tell at a glance who the financial adviser is really working for and advisers would save a bundle on clothing for work. Sounds like a “Win – Win” to me.

4 comments to Fee Disclosure and Why Financial Advisers Should Be More Like Athletes

  • John Page

    Hey Dan,

    I love it! Wonder who the consumer would pick..the guy with the jersey full of ads, or the guy who could legitimately wear the suit?

    John Page

  • Great blog Dan! It’s clearly unfair for commission salespeople to pass themselves off (wolves in sheep’s clothing) as ‘advisers’, ‘planners’, ‘consultants’, ‘counselors’ or under any title that masks their true allegiance(s).

  • Lovaii Navlakhi

    Dan:

    You have said so much in so few words. Outstanding!

  • Ashok Kumar Sethi

    Sir,
    What you wanted to convey, has been delivered. But there are two types of Financial Planners viz; running their own business and the other under employment. So for, logo concept is related, the CFP may wear the tag of his employer. But the problem will emerge of tag or logo, when one is dealing independently. I ,therefore, suggest that those CFPs, who are working independently should be very cautious about choosing the various vendors. At this juncture, the Ethics of FPSB have to be kept under consideration ie; choose and introduce those vendors to clients, who are genuine, reliable and provide life long services and not to recommend those offering huge commission to CFP independently.

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