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Post Certified Financial Planners and the Fiduciary Oath (from Ric Mauricio)
Created by John Eipper on 02/27/21 7:16 AM

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Certified Financial Planners and the Fiduciary Oath (from Ric Mauricio) (John Eipper, USA, 02/27/21 7:16 am)

Ric Mauricio writes:

To answer John E's question, yes, CFPs are "sworn in" to having a fiduciary duty to their clients. All of the CFPs within my sphere adhere to this, but since it is a small sample base, I cannot make a judgment whether other CFPs adhere to the Fiduciary Code.

However, my experience with stockbrokers is a much larger group. Out of 300 or so "non CFPs," I can state that I could only trust five of them. Let me share a story. One day I was in my cubicle with one of my clients when a broker came rushing over as he was on a cold call. He said he knows why stock mutual funds go up and down, but asked why would bond mutual funds fluctuate? My client asked if he could answer. He explained why. As the broker walked away, he said to me, "I'm sure glad you're my broker." But this wasn't as bad as another broker told a prospective client that a bond mutual fund couldn't go below $15. Another broker and I asked her how she could say this. Her response was that it IPOd at $15 so it couldn't go below that. Ouch!

As a consultant to the many high tech, biotech and VC firms here in Silicon Valley, I have encountered many managers who have no idea how to manage people. They just pretend that they know what they're doing. They cover up their insufficiencies and insecurities by bullying their employees. Known as the "Fixer," I am often brought in to fix the problems.

One of my team members asked why I don't scream at her and make her feel small when she makes a mistake. I told her it's because I'm perfect and I never make mistakes.

Let's change subjects for a moment. A question for Jordi Molins: if the hedge fund drops 20% (eg. a company that recently purchased bitcoin dropped 50% in a few days), then the client loses 10%. Still seems to be a lopsided risk vs. reward deal. I think that most insurance contracts pay that 3 to 4%, with no risk to interest or principal.

JE comments:  Ric the Fixer!  This sounds ominous, but WAISers know what a sweetie you are.  The impression I've always had of traditional brokers is that they have their own interests in mind, not yours.  This is probably an oversimplification, but it's also the basis for the Charles Schwab model of the 1970s, which has been imitated everywhere:  the best manager of your money is...you.

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