REP.: During your tenure as SIFMA chair and chair-elect, what have you learned about the perception of the financial services industry?
Chet Helck: There was a time not long ago when people thought of their financial advisors and bankers in the same way they thought about their doctors—professionals who could be counted on to give expert advice. While that faith hasn’t completely eroded, I think people have become more skeptical, as financial institutions have grown and investment products have become more complicated. We need to remind people that the industry is also a powerful driver of economic growth. Not to deny that the industry has generated its share of troubling headlines, but our collective contribution to supporting the entrepreneurial spirit is too often missing from the conversation.
REP.: The industry has taken its share of punches over the past few years. What can it do to restore its reputation?
CH: We need to commit to thoughtful risk management. Yes, taking risks is at the heart of our business, and we absolutely cannot regulate risk out of the system entirely. But we must be prudent about understanding exactly what it is we’re risking, and make sure that risk management processes are regularly reviewed and improved as necessary. We also need to be more transparent, especially when dealing with individual investors, and we need to advocate for appropriate safeguards.
REP.: What would a uniform fiduciary standard mean for financial advisors?
CH: It is critical that any standard is business-model neutral and is not an extension of the 1940 Act, which simply won’t work in today’s world. It’s not about brokers versus RIAs. Raymond James has both types of advisors, and we want to ensure they can both continue to operate in the ways that work best for their clients. It’s far more about clients and their expectations when working with any financial advisor. To achieve the uniform standard, SIFMA is advocating for the appointment of a self-regulatory organization (SRO) with oversight over RIAs to further enhance investor protection and ensure the integrity of any uniform fiduciary standard. It can be a controversial topic in our industry, but it’s the right thing to do for the client, who should be our top priority.
