Dear Elizabeth Warren
One of the changes the new President has implemented is the repeal or delay of the Department of Labor’s Fiduciary Standard for advisors working with retirement accounts. This is a regulation you have been very vocal on, continually espousing that it is necessary because, essentially all advisors are crooks and charlatans and all we really want to do is separate our clients from their money to fill our own coffers. So the government must step in and do something.
Allow me a few moments to explain to you what we really do for our clients. Here’s how 2016 went for my firm.
In January, I had a death claim on a life insurance client. Most advisors will tell you that it is a career-defining moment, when you are standing on the front porch and delivering a check to someone whose world has just collapsed. This case was a little easier since this was a life insurance policy that was used in a business setting, insuring a key executive. But it was still difficult because the insured was a friend of mine, someone I’ve known and worked with for over thirty years. He was also my age, with a wife and three children and these types of events make you think of your own mortality.
Ironically, in February I had another death claim, this one on a client who owned annuities. I believe you’ve spoken of annuities, those evil products that unscrupulous salesmen sell to anybody and everybody just so they can collect big commission checks. In this case, the annuity was recommended because the client needed to shelter as much investment income as possible to qualify for a state prescription program that would pay for all her medications. The income limit was slightly higher than her Social Security income so reducing taxable income was of paramount importance. Over her remaining lifetime, the prescription program saved her at least $100,000 and the value of her annuity doubled. By the way, this client was also my mother so I am sure you will have some choice words to say about a son who would stoop so low to sell a worthless product to his own mother.
The rest of the year was mostly uneventful other than the normal ups and downs of the stock market and the continual service of our clients…until October.
We had a financial planning review meeting scheduled for a long-time client, a couple my partner has known for many years. One spouse recently retired and the other was planning to retire in a few years. The purpose of the meeting was to determine the viability of that goal and what type of retirement lifestyle they could afford. But that all changed when one of the spouses was diagnosed with a terminal illness. We immediately changed direction and spent the next few days creating and revising documents, insurance policies and retirement plans to make sure all was in order and final wishes would be met.
This is the type of work we do for our clients. Not to sound like Dickens but we are there for our clients in the best of times and the worst of times. Sure, we get paid along the way, but we do what is right for our client not because it’s the law but because it’s the right thing to do. You can’t legislate honesty and integrity.
Senator, I don’t know why you portray us the way you do. The hardest part of this business is getting clients. Once we get one, why on earth would we do anything to harm that relationship? Sure, there are some unscrupulous advisors among us. Bernie Madoff comes to mind. But that doesn’t mean we all should be considered like him.
You’re a U.S. Senator. Some of your colleagues have misbehaved, been removed from office and even sent to jail. Two Presidents have been impeached during my lifetime and one of them resigned in disgrace. How would you feel if we treated all members of Congress as if they were crooks?