Financial Services Roles Need Defining
“It’s a great idea, however …”
That short and incomplete sentence sums up how Tracy Ann Miller CFP®, CEO and chief portfolio officer of Portfolio Wealth Advisors, LLC, headquartered in Oklahoma City, OK, views the current discussion regarding the establishment of a nation-wide, uniform fiduciary standard governing the activities of all types of financial advisors.
“It is an idea that has a lot of merit, but also has a lot of difficulties,” Miller said, noting that much of the difficulty comes from within the industry itself. “The industry needs to put aside its differences and step up and do what is right for our individual clients.”
Miller believes that clear and distinct definitions of the various roles within the financial services industry are needed. As examples, she cites that professionals within the industry will describe their work to clients by saying, “I am an advisor,” or “I am an accountant,” or “I am a money manager,” or “I am an insurance agent” – but most clients have little understanding of those roles.
“All of these terms can relate to the exact same activity in any given instance, so it is no wonder people are confused. From that point of view, establishing a national uniform fiduciary standard might make sense and clear things up,” Miller pointed out. “There simply is too much jargon in our industry that our clients do not understand. If we don’t work on cleaning that up, we are not going to make any progress.”
She said that what clients do clearly understand after the financial debacle of 2007 to 2009, is that they are transparency-minded. They want to know exactly how much they are paying in fees.
“And rightly so,” Miller agreed. “The Great Recession put a big dent in the trust level people had in the financial services industry,” she said, explaining, “The low-interest environment after the Great Recession shifted investing away from banks over to insurance companies offering various types of product solutions to create long-term income streams.” Miller believes that what was aimed at serving needs and decreasing confusion has actually only made things even more difficult for Joe the Consumer to understand. “The products and services available today are as different from what was offered in the past as the car phone from 30 years ago is to the smartphone of today.”
That is why she insists on regular planning and communication with her clients, building a platform allowing to her to forecast their needs and determine what will help meet those needs. She counsels all advisors working for her firm to employ flexible communication methods – whether they be FaceTime, Skype, email, Facebook messaging, text messages, telephone calls or good old-fashioned face-toface meetings in the office – because each client has a different preferred method of communication.
Miller emphasized, “It’s like what Dwight Eisenhower is quoted for saying: ‘Plans are useless, but planning is indispensable.’”