Alignment Of Outcomes With Advice Needed

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    A better alignment of outcomes for those with capital and those offering advice might be the elixir that brings trust and confidence back to markets, says Peter Jarvis, executive director of the Toronto CFA, writing in the June 2012 edition of ‘AlternativChronicle.’ Financial markets are underpinned by a belief that the investment process is fair, markets are efficient, and investors can expect financial institutions or advisors to be trustworthy. Recently, however, clients have had neither confidence in markets nor trust the advice they receive. “Not only have they discovered investment’s ugly side downside risk), but have also been educated about fraud, egregious breaches of ethics by a few professionals, and a cavalier attitude by some managing OPM, Other People’s Money,” he says. Changing these perceptions to regain trust and resurrect confidence is no simple task, although other markets, most notably the UK and Australia, are now in the process of addressing this misalignment of interest. In those markets, the idea that advisors should be fiduciaries is becoming accepted. The article is at AlternativChronicle