Fiduciary Standard Of Care: Interview With Carson Group

ValueWalk’s interview with Jamie Hopkins, Director of Retirement Research at Carson Group. In this interview, Jamie discusses his and his company’s background, changes to the fiduciary standard, the SEC’s limit of listing fiduciary standard of care, criticisms of the SEC, and pushing for broader consumer protections if he was the SEC chairman.

standard of care

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Can you tell us about your background?

People ask me about what it is that I do, and I often tell them that I am a consumer and financial advisor advocate.  I have an education background as an attorney in private equity and estate planning. This work eventually led me into ERISA retirement plans and ultimately to The American College of Financial Services, the premier leader in financial education, where I co-created a program entirely focused on retirement income planning with Professor David Littell.  I ended up teaching financial professionals for about 7 years, impacting over 30,000 students during my time at the College.  But, I had two major frustrations in that role.  First, I was not directly working with consumers as much as I would have preferred and second, many advisors would learn but then not implement.  So when the opportunity came along to be the Director of Retirement Research at Carson Group and drive forward the retirement planning process, best practices, education, and client outcomes, I jumped.  Carson Group services almost 28,000 households, so the impact directly to individual families is tremendous.

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Can you tell us about your firm?

Carson Group strives to be the most trusted in financial advice.  We provide world class investment, financial, and retirement advice throughout the country. Our advisors are fiduciaries and are legally required to put our client’s interests first. Ron Carson built our company to be a 100-year firm that disrupts the industry and provides client experiences like no other company in existence today. Financial advice and technology is changing rapidly, and so are consumer needs. Far too many companies are providing outdated services and client experiences – Carson Group separates itself from the pack by serving as a leader in technology and best practices for financial planning.

What do you think of changes to the Fiduciary standard?

Carson Group and I fully support fiduciary standards and putting client interests first before anything else. Individual investors are the reason we exist.  As a firm, we challenge the status quo and provide clear fees and best practices for financial advice to support our goal of helping Americans have a more secure financial future. The SEC’s new rules should increase standards of care if properly applied to the broker world, however, it is possible that the new rules will bring suitability and disclosure with no real changes to practices.  That would be unfortunate but it is too early to tell how the new SEC rules will apply.  The SEC’s limit of listing fiduciary standard of care as the standard of care on the new CRS form falls short of what we were hoping for. If you are a fiduciary, you should list that you are a fiduciary as your standard of care.  If you are in a brokerage role and your standard is less, with the SEC best interest standard, you should list that as your standard of care.  There is a real risk that the new rules will only cause consumers more confusion than before and that they will struggle to identify true fiduciary advisors moving forward. I have been extremely outspoken on fiduciary standards for years, and support the Department of Labor’s attempt to expand the standard.

There have been a lot of criticisms of the SEC lately, what do you think and what do your clients say?

The SEC is an extremely important agency that protects consumers and investors.  While everyone might not agree with each decision the SEC makes, their primary focus and impact cannot be denied, they make the US investor world better.  While I have doubts about the effectiveness of the new fiduciary rules and would have liked to have seen a more consumer focused rulemaking process, these rules could still significantly and positively benefit investors if properly applied and enforced. While we want the government to protect consumers, we also have to recognize that too much regulation can negatively impact businesses and their ability to deliver quality services.  I don’t think we have reached the level in financial planning that requiring fiduciary advice hurts consumers, but, for example, under the DOL rules, some companies would have struggled to comply. If a broader fiduciary standard is passed, Carson Group, along with other fiduciary advisors, will be more than happy to fill in the gap of consumer planning needs if other companies can’t comply with the higher standard of care.

FINRA is often seen as worse than the SEC, what should the SEC and FINRA be doing differently? 

FINRA and the SEC play important roles, but often regulations and agencies can get lost in the details. The goal of these organizations should be to support consumer protections and help companies provide better advice, however these regulators often get bogged down in minutia instead of focusing on the big picture items.

What would you do if you were Commissioner of the SEC?

Simply put, if I were the commissioner of the SEC, I would have pushed for broader consumer protections.  Consumers need to come first, period.  A fiduciary standard is expected by consumers so we should deliver it.  Financial services is one of the least trusted professions for a number of reasons: sub-quality advice, minimal education requirements, and hidden fees.  As a former educator, I would also likely push for a higher standard of education in the industry.  I would love to see a day where the CFP® education is required across the board.  This does not mean everyone needs the CFP® mark, but the education standard is valuable.




About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver