Resources for Advisors

"What are the Specific Fiduciary Duties?" 

This article explores what the fiduciary duties of due care, loyalty, and utmost good faith mean in the context of providing financial and investment advice.  Specific duties of a financial planner and/or investment adviser are identified and discussed.

 

Ten Ways Financial Planners Can Add Value and Fulfill Their Fiduciary Duties to Their Clients

In this paper presented to the Financial Planning Association of Central Florida in September 2007, Ron shows how financial Planners can work with other professionals and their clients in a "win-win-win" situation, through holistically addressing the many risks which may confront a client. Also for reference are the Powerpoint slides from Ron's presentation regarding such to the FPA of Cental Florida.

 

"Managing Conflicts of Interest:  The Limits of Disclosure and Informed Consent." 

Think disclosure alone solves conflicts of interest?  Think again.  This article explores conflicts of interest, the inherent limitations of disclosures, and the difficulty in obtaining "informed consent."  This article notes that the SEC's continued reliance on disclosure is often misplaced.

 

"Today's Greater Mission for State IA Examiners."

Ron A. Rhoades gave a presentation to NASAA IA Examiners on the application of fiduciary duties in August 2008. A copy of the PowerPoint presentation is attached. Separately posted is Ron's outline, "The States Emerge as the Protectors of Main Street", containing research on several aspects of fiduciary status. Also attached are Case Studies on proprietary mutual funds and Equity Indexed Universal Life policies, along with Ron's "Observations" regarding the case scenarios presented.

 

The Attorney as Complete Advisor:  Fiduciary Ancillary Business Models.

(Florida Bar Journal, Volume 79, No. 3, March 2005).  Ron comments on The Florida Bar's Ethics Opinion 02-4, relating to referrals made by attorneys to financial advisory firms.

 

Forming a Wealth Management Team. 

This brochure by Joseph Capital Management, LLC, explores procedures which can be followed in forming a wealth management team to serve affluent clients in a holistic fashion, while preserving each individual professional's independence and advancing at all times to the best interests of the client.

 

Due Diligence in Stock Mutual Fund Selection: Estimating "Total Fees and Costs." The fiduciary duty of a personal financial advisor requires the advisor, or his or her firm, to undertake due diligence prior to recommending an investment product. FiduciaryNow.com offers the following resource materials to advisors who desire to explore this area in further detail:

 

Rhoades, "Estimating the Total Costs of U.S. Stock Mutual Funds" (2006).

 

Roger M. Edelen, Richard Evans, and Gregory B. Kadlec, "Scale effects in mutual fund performance: The role of trading costs" (2007). This white paper provides important insights into trading costs within mutual funds, and finds: "Mutual funds' annual trading costs are larger in magnitude than the expense ratio."

 

Alex Frino, David R. Gallagher, and Teddy N. Oetomo, "Futher Analysis of the Liquidity and Informational Components of Institutional Orders: Active versus Passive Funds" (2006). This paper finds that "the total price impact of index funds' trades is higher than that of active funds'."

 

Professors Alan R. Palmiter and Ahmed E. Taha, "Mutual Fund Investors: Divergent Profiles," SSRN Research Paper No. 1098991 (Draft, Feb. 2008), which is included along with the comment letter they provided to the SEC regarding Summary Prospectus disclosures.

 

Jason Karceski, Miles Livingston, and Edward S. O'Neal, "Portfolio Transactions Costs at U.S. Equity Mutual Funds" (2004), an important paper funded by the Zero Alpha Group, which discusses many (but not all) of the "hidden" transaction costs of mutual funds in a very readable discussion.

 

John A. Haslem, "Normative Transparency of Mutual Fund Disclosure" (2008), which discusses the inadequacy of the SEC disclosure regime as to mutual fund fees and costs, including transaction costs.