In finance, relying on those with unearned authority can be a serious and costly mistake.
New York, NY (PRWEB) June 12, 2013
The Abernathy Group II Family Office says the “mass affluent” have used family offices, albeit quietly, for some time, and The Wall Street Journal’s recent article, Financial Advice, Served Rare, explores their services—and there’s more to the story.
Today’s easy access to information can make comparison shopping among some consumers, whether searching for a new Smartphone or an old Victorian home, border on the obsessive. Yet, when considering financial services options, what is perhaps the best choice is often absent from their lists. Why?
Wall Street does not want the secret to get out.
Co-founders of The Abernathy Group II Family Office, Steven Abernathy and Brian Luster, are changing that—one client at a time. “Investors do not always understand the after-effects of the repeal of the Glass Steagall Act, but, they’ve caused a shift in how institutions do business and what their obligations to customers are,” says Luster, also the company CEO.
“As a result [of the repeal of the Glass Steagall Act], advocacy and fiduciary obligations to clients were trumped by the push to sell more products to clients and as a result make more money from clients,” said Marie “Mel” Lagomasino, former CEO of GenSpring Family Offices.
This ‘blurring of the lines’ in financial services can result in the public perceiving salespeople as professional investors when they’re not.
“It’s not always obvious who’s a fiduciary and who’s not—particularly given the fact that some broker dealers are able to wear both hats, fiduciary and salesperson, which is legal, just not ethical,” says Luster. “A product may be considered “suitable” but by no means does this indicate an obligation to serve clients’ interests 100% of the time. In the U.S., where there are over 1 million financial representatives, less than 3,000 are registered fiduciaries, according to the National Association of Personal Financial Advisors.
“When buying a car, people walk into a dealership knowing salesmen have an agenda: sell cars; earn commissions,” asserts Mr. Abernathy. “In finance, relying on those with unearned authority can be a serious and costly mistake.”
“Consumers can’t make a fully informed decision if they don’t truly know and understand all the choices on the table, adds Abernathy. “People work hard and put their trust in money managers, it’s not only reasonable but vital that their interests be served fairly and objectively.”
About The Abernathy Group II Family Office:
Steven Abernathy and Brian Luster co-founded The Abernathy Group II Family Office and the country's first Physician Family Office (PFO). The Abernathy Group Family Office sells no products, receives no commissions, and is independent, employee-owned, and governed by its Advisory Board comprised entirely of thought-leading professionals. They are regular contributors to several publications and blogs including The Huffington Post.
The information contained in this article is provided solely for convenience purposes only and all users thereof should be guided accordingly. The Abernathy Group II does not hold itself out as a legal or tax adviser. If you wish to receive a legal opinion or tax advice on the matter(s) in this report please contact our offices and we will refer you to an appropriate legal practitioner.