Commentary: Arbitrators, Litigators & Fiduciary Imitators

The content herein does not represent a legal opinion, but is based on my interviews with attorneys on my consumer and adviser video talk shows.

In general terms, the consumer is at the mercy of a professional. Whether it’s auto or home repair, Joe Public doesn’t have the knowledge to assess the estimate or the finished product. It’s no different with financial professionals. In the wealthiest country in the world, we are the least educated when it comes to money matters.

Honestly, how many consumers can read their homeowner’s policy? And even if they did, do they understand it? You would think by now insurance companies would routinely hand the policy owner a summary statement of benefits or some type of crib sheet of contractual imperatives. And if these carriers are thinking about providing disclosure, why can’t it be in the language of the consumer?

For all the disclosures, disclaimers and caveats that are published by insurance companies and even investment houses, certain contractual semantics heavily favor the institutions, not the consumer or investor. Bottom line Joe Public doesn’t have a chance unless he/she litigates through arbitration or, God forbid, takes their agent or adviser to court. [sidebar: When a geriatric client is unhappy with you, try your utmost to settle the dispute. Arbitration favors seniors, especially “grannies.”]

In recent years, a rash of fake fiduciaries, which in the end are just insurance agents, financial advisers and money professionals, who don’t meet the standards of a fiduciary and shouldn’t be holding themselves out as one. When the public thinks of financial fiduciaries, they list CPAs, attorneys or trust officers. Even fee based registered investment advisers make the list by offering fee only – no commission products. Now this is not to say the others couldn’t attain to a fiduciary status, but in arbitration those who hold themselves out as fiduciaries and fail the definition, are opening themselves to greater scrutiny, especially if their online bios tout an area of expertise.

Legal claims could center on the marketing approach the individual or firm uses in the public domain like ‘retirement expert’ or ‘top money manager.’ If things go awry for the consumer or investor, their advocates will look to the advertising and other slogans in the media and online for evidence to label the actions of the financial professional as ineptness to outright fraud. That’s not even incorporating errors and omissions that seem to occur with a great degree of frequency.

In my opinion, it’s better to promote your services with a bit of humility, rather than billboard bravado. Most financial professionals are not ready to give credible evidence to support their advertising claims in the public domain.

Steve is a syndicated financial columnist, talk show host and popular platform speaker. He is also a nationally recognized videographer, content creator and co-contributor to Advisys, InsMark and LifeSpecs. Steve’s videos and content are distributed to over 280 media outlets and 200,000 Twitter users. To contact him visit