Do clients perceive a difference in financial advisors?

No. In general, clients do not perceive a difference, but they should.

The SEC sanctioned a 2008  RAND study entitled "Investor and Industry Perspectives on Investment Advisers and Broker-Dealers".  This study investigated clients'  perceived differences between a Fiduciary versus a non-fiduciary advisor role.  The study findings were clear:   Clients do not perceive a difference between working with financial advisors  who are not required to put  client interests ahead of  their own or their firms interests,  versus a fiduciary bound advisor who is only loyal to his or her clients.  The results suggest that clients need more education in order to understand the distinction between the two standards of stewardship.  Additionally, the conclusions re-confirmed prior studies that clients are skeptical of financial advisors  in general, but do view their own  advisor in a positive light  provided that there  is ongoing contact and rapport.   The study  further emphasized that frequency of client contact and rapport was of greater importance than fees  or investment performance.   There was no evidence of  stewardship concerns with their own advisor. 

The primary takeaway is the need for clients to have a better understanding of the differences in advisor obligation  and standard of care and to value this equally if not higher than the quality or volume of rapport with their advisor.   Indeed, a physician's wonderful "bedside manner" would certainly lose its luster if the patient discovered just a "suitable diagnosis",  higher fees and "kick backs" from pharmaceutical companies!

Please click here to read RAND's findings.