{"id":7679,"date":"2016-07-22T07:12:41","date_gmt":"2016-07-22T14:12:41","guid":{"rendered":"http:\/\/blog.paladinregistry.com\/?p=7679"},"modified":"2016-07-22T07:12:41","modified_gmt":"2016-07-22T14:12:41","slug":"doing-it-yourself-with-the-aid-of-a-broker-is-a-dead-model","status":"publish","type":"post","link":"https:\/\/www.paladinregistry.com\/blog\/advisors\/doing-it-yourself-with-the-aid-of-a-broker-is-a-dead-model\/","title":{"rendered":"\u201cDoing It Yourself\u201d with the Aid of a Broker is a Dead Model"},"content":{"rendered":"

Is it time to totally re-think and transform the entire idea behind brokers as a source of financial help for a bewildered public? Do all of the technological \u201ctools\u201d at brokerage firms<\/a><\/span><\/strong> actually help investors achieve financial health?<\/p>\n

In a soon to be fiduciary world (at least for retirement accounts), can brokers actually change their stripes? Can they really change their entrenched culture? Can actual change be forced by regulatory fiat? These are prescient questions as we begin the transformation process for the financial services field.<\/p>\n

Prior to starting my fee-only financial planning firm three decade ago, I spent a couple years as a broker for a national firm.\u00a0 Therefore I have some understanding of how brokers approach the overall financial services field. These firms can be very creative, and their legions of lawyers and lobbyists will likely carve out space whereby they can continue to operate much as they do today in the post DOL world. Through confusion and obfuscation, brokers will likely portray themselves as fiduciaries, while simultaneously continuing to push products.<\/p>\n

We have actually seen another version of this movie before. 25 years or so ago, traditional stock brokerage firms managed to twist the descriptive phrase \u201cfee-only\u201d, (used to describe an advisor paid only by the client), into \u201cfee-based\u201d, meaning a broker or advisor who has some component of compensation as a fee but is still paid by someone other than the client\/customer. These firms have continued to use these terms up to the present day, as a way of confusing the investing public. I have little doubt that we are about to see the sequel and it will be equally as confusing to investors.<\/p>\n

Industry observer Nick Murray<\/span><\/strong><\/a> often points out that we live in a nation of mostly financial illiterates. While the term may be harsh, so are the consequences for following the broker led path towards fanciful investment products.\u00a0 These products usually are aimed at alleviating symptoms of financial problems rather than the underlying problems themselves. This is precisely why so many brokerage firm customers roam from one brokerage firm to the next in search of nirvana.<\/p>\n

The innate behavioral issues embedded in our human DNA, coupled with the absence of a specialized part of our brain for financial decision making, leaves investors vulnerable. My generation, (baby boomers), continue the march towards retirement age, poorly prepared financially for the future. The emphasis on brokers and on investment products is partly to blame.<\/p>\n

Very few individuals are equipped, either by education or experience, to navigate the financial services maze all by themselves. We need to make it easier, not harder, for investors to clearly distinguish between advisors and brokers. The emphasis should be placed on seeking planning help first. Most of the \u201crobos\u201d are just investment managers, still leaving individuals in need of the direction and discipline that financial planning can provide. Those individuals who are willing to learn, usually are willing to change. \u201cDoing it yourself\u201d with the aid of a broker is a dead model. Let\u2019s make sure we can provide something better.<\/p>\n

To learn more about James Wilson, view his Paladin Registry research report<\/span><\/a>.\u00a0<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Is it time to totally re-think and transform the entire idea behind brokers as a source of financial help for a bewildered public? Do all of the technological \u201ctools\u201d at brokerage firms actually help investors achieve financial health? In a soon to be fiduciary world (at least for retirement accounts), can brokers actually change their stripes? Can they really change their entrenched culture? Can actual change be forced by regulatory<\/p>\n","protected":false},"author":88,"featured_media":7682,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[325],"tags":[],"class_list":["post-7679","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-advisors"],"yoast_head":"\n\u201cDoing It Yourself\u201d with the Aid of a Broker is a Dead Model<\/title>\n<meta name=\"description\" content=\"Is it time to totally re-think and transform the entire idea behind a broker as a source of financial help for a bewildered public?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.paladinregistry.com\/blog\/advisors\/doing-it-yourself-with-the-aid-of-a-broker-is-a-dead-model\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" 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