Health insurance reform has been at the forefront of the political scene for a number of years.  But did you know that financial reform is constantly being discussed as well?   A major issue at hand is whether all “advisors,” which includes stock brokers and insurance agents, should have to follow a fiduciary standard.  A fiduciary is defined as someone who acts in utmost good faith, in a manner he or she reasonably believes to be in the best interest of the client.  Would it surprise you to know that not everyone feels stock brokers and insurance agents should have to put the interest of the client ahead of their own?  Unfortunately, that is the case.  Here is an article discussing the issue. This article is from 2010, but is still relevant (unfortunately) today.

It’s no secret that big insurance companies in this country have our elected officials in their back pocket.  The insurance companies don’t want to be responsible for the interest of their clients; they just want to keep selling them products that may or may not be in the client’s best interest.  The insurance companies and brokerage firms have pressured certain Congressman to remove the fiduciary requirement from financial reform.  But haven’t we been told the whole purpose of financial reform is to ensure that the consumer is protected, so that a Madoff-like situation doesn’t happen again?

Why does it have to be so hard for a consumer to know whether they can trust the financial advice they are receiving?  If you are sick, you can feel comfortable going to a doctor knowing that your doctor has your best interest in-mind.  In addition, you know that your doctor was required to undergo extensive education and testing before he or she could call himself/herself a doctor.  The same thing can be said for lawyers, and accountants.

Unfortunately, anyone can call themselves a financial planner.  There is absolutely no education requirement (you could have been a high school drop-out), there is no mandatory testing, and there is nothing that says you have to work in the best interest of your clients!  I always find it amazing to hear someone tell me they are a “financial planner,” and then find out that they have had zero education relating to financial planning; but they are a great salesman.  In my eyes, financial planning should not be about being a good salesman.  It should be about helping people in an area that can greatly impact their lives, and their children’s lives.

Fortunately, there is a certification out there that requires a fiduciary standard of care.  CERTIFIED FINANCIAL PLANNERTM professionals are bound by a Code of Ethics which requires them to always act in the best interest of their clients.  In addition, CFP® Certification requires extensive education, a comprehensive two-day, 10-hour examination, and a minimum of three years work experience in the financial planning process.  To learn more about why you should choose a CERTIFIED FINANCIAL PLANNERTM professional when hiring a financial planner, visit the Certified Financial Planner Board of Standards website.

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John P. Chladek, MBA, CFP® is the President of Chladek Wealth Management, LLC, a fee-only financial planning and investment management firm specializing in helping families and couples who are not yet retired realize their financial goals. For more information, visit

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