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Tony Robbins Takes to Wall Street to Ask People About Fiduciaries

FiduciariesIf you have not noticed, famed coach Tony Robbins has decided to focus on the financial services industry with his new book “Money: Master the Game” with an extreme focus on who and who is not acting asfiduciaries. Most people do not understand what it means to be a fiduciary which means that most people do not understand which advisors are required to act in their client’s best interest. To make his point, Tony took to the streets to ask people about their understanding of fiduciary.

Not surprisingly, the vast majority of people on the street did not know what being a fiduciary means. Actually, only one person did but that person runs their company’s defined contribution (DC) plan. The issue of who is and who is not a fiduciary, or who is required to act in their client’s best interest, is front and center with the passage of the DOL’s conflict of interest rule which affects not only most ERISA plans but also IRAs.

So why should plan sponsors care about what Tony Robbins is doing? Given his popularity and reach, it could lead to lots of questions from employees about the advisor on their DC plan as well as the fees being paid, some of which are high according to Tony eroding returns and diminishing account balances.

All of which could ultimately be a good thing but it forces DC plan sponsors to understand their fees and know whether their advisor is acting as a fiduciary on their plan as well as when advising employees on IRA rollovers. The reality is that starting in 2018 all advisors will either have to act as a fiduciary on a DC plan and IRA unless they are working an exemption known as a best interest contract exemption (BICE).

At a recent TRAU (The Retirement Advisor University) program held at UCLA Anderson, Don Trone, known as the “father of fiduciary” training almost 20,000 investment professionals and plan sponsors over almost 30 years, bemoaned the new rule. According to Trone, the new rule misses the point because it is too focused on fees and is punitive opening the door for lawsuits rather than focusing on what’s best for the client. Once the gold standard or ceiling of the financial services industry, the DOL rule has made fiduciary the floor and the bronze standard. Take that Tony Robbins!

Fred Barstein

Fred Barstein

Founder & Editor-in-Chief at 401kTV | TRAU | TPSU
Fred Barstein is the Founder & Editor-in-Chief of 401kTV. Fred is also the Founder and CEO of The Retirement Advisor University (TRAU), a collaboration with UCLA Anderson School of Management Executive Education and The Plan Sponsor University (TPSU).Mr. Barstein was also Founder and Editor-in-Chief of NAPA Net.
Fred Barstein
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