Not everyone giving financial advice is driving with a license.
Most consumers assume that advisors discussing and recommending life insurance, investment planning and retirement strategies are held to the same standards. They’re not.
Those with securities licenses operate under defined rules, disclosure, best interest, supervision and continuing accountability. That’s how it’s supposed to work; the rules protect the investors.
But not everyone offering “creative financial solutions” hold those licenses. They market under titles like consultant, strategist, planner, or advisor without the same oversight or responsibility. It’s perfectly legal in many cases, but it’s not the same level of protection.
Think of it like driving, someone with a license has taken the tests proving a familiarity with the rules of the road, has strict parameters of action, is subject to consequences and has insurance. The unlicensed driver can still get you from point A to point B, until something goes wrong. Then you find out the rules aren’t the same, similar consequences don’t exist, there’s no insurance and available recourse is far different. To be sure, either driver can speed or ignore traffic rules, but only one can be held reasonably accountable.
Get the securities licensing and you subject yourself to all the traffic laws. Don’t get it and you can go a 100 mph and ignore the rules in place for the protection of society.
It’s always felt like a bit of a perverse system where those who don’t want to follow the rules simply don’t get the license, and they get to operate without a governor. Social media advertising demonstrates this indisputably.
Consumers don’t understand the difference between Suitability, Best Interest and Fiduciary Duty and what applies to which agents and reps. The difference isn’t academic, it’s consequential. Cleary, there are “good guys” and “bad guys” on both sides, but a securities registered advisor with much more stringent duties and responsibilities with a broker dealer or an RIA in a supervisory capacity offers much more in terms of guidelines and recourse than a simple insurance registered agent.
It may not be the best idea to allow the unlicensed drivers to drive 100 mph with passengers on the same roads.
Bill Boersma is a CLU, AEP and LIC and the founder and owner of OC Consulting Group. More information can be found at www.OC-LIC.com, www.BillBoersmaOnLifeInsurance.info or email at bill@oc-lic.com or call at 616-456-1000.
Securities offered through Valmark Securities, Inc. Member FINRA, SIPC. Investment Advisory Services offered through Valmark Advisers, Inc. a SEC Registered InvestmentAdvisor.
OC Consulting Group and its affiliates are separate entities from Valmark Securities, Inc. and Valmark Advisers, Inc.
