Thursday, April 19, 2012

Shutting Out the Middle-Class? ran an interesting interview this week with Louis Harvey of the consulting firm Dalbar. Harvey was asked about the impact of the DOL or SEC imposing a universal "fiduciary" standard across the financial industry.  Harvey's conclusion?  The middle class will be shut off from advice.
“You can make three phone calls to three firms and ask their minimums,” Harvey said. “Every brokerage firm has a minimum for their RIA business which is substantially higher for the minimum of their commission business. The median for the RIA business is about $100,000; on the other, you can get a commission-based rep for about $5,000 [in assets].”
Also interesting is how Harvey labels himself in the great fiduciary debate.
Harvey considers himself a “separatist” on the fiduciary question, seeing a role for both fiduciary and commission-based advisors each in their own areas. He sees a danger in “trying to take the guys selling Fords and Chevys and bringing them into the fiduciary world. Only those who are qualified should be there,” he says.