Fiduciary: It’s not dead yet – Carosa

Summer must be the silly season because for the second week in a row the topic conjures up an allusion to those great 20th century stand-up philosophers Monty Python.

I mean, the reference in the title to the iconic scene (among many) in their smash hit movie Monty Python and the Holy Grail is so obvious, if you don’t see it immediately then just ask your family to bring you out to the curb because your dead.

One that that’s not dead, however, is the concept of fiduciary. Some may try to say fiduciary is dead, but it’s actually feeling much better.

Related: A timeline of the contentious fiduciary rules

Let’s follow the logic of fiduciary’s exaggerated death. Its apparent demise began when the courts vacated the DOL’s Conflict-of-Interest (a.k.a. “Fiduciary”) Rule. Some now feel the SEC’s Regulation Best Interest has effectively diluted the significance of “fiduciary” by robbing it of its most compelling trait: “best interest.”

If fiduciaries can no longer differentiate themselves from non-fiduciaries because “best interest” now applies to both, does “fiduciary” now become a distinction without a difference?

And with that question comes the inevitable conclusion that “fiduciary” is dead. It has lost all its panache. And with that loss comes the loss of its value in the marketplace.

So goes those who say the glass is half empty.

But a half empty glass is also half full. And it is this bounty which can breathe life back into fiduciary.

You see, fiduciary, in its full meaning, extends well beyond “best interest.” Whether it’s “duty” or “loyalty” or any other chivalrous term you choose, fiduciary has a deep genealogy of case law no SEC regulation can ever mute. They might not have the same snap as “best interest,” but, if we are to accept the wisdom of trust precedent, they do have legal meaning, legal differentiation.

And where there’s a legal differentiation, cannot a marketing differentiation be far behind?

Here’s the best news: If we have learned anything from marketing breakthroughs in other industries, the secret to the future of fiduciary is something those in the industry take for granted. In fact, it’s so familiar to them, they don’t place any value to it.

But clients will.

The industry may not yet have discovered this secret, but “fiduciary” knows it’s there. Yes, fiduciary is very happy. It may even get up and go for a walk.

Read more: 

• How SEC Chair Clayton answered 7 criticisms of Reg BI, IA fiduciary guidance
• A fiduciary knows the harm of feeding the dog
• A fiduciary must separate the wheat from the hype