NAPFA plans an expanded fiduciary promotion

The National Association of Personal Financial Advisors plans to expand its year-old Focus on Fiduciary outreach program in an effort to differentiate its members from other advisers in the eyes of the public.

CHICAGO — The National Association of Personal Financial Advisors plans to expand its year-old Focus on Fiduciary outreach program in an effort to differentiate its members from other advisers in the eyes of the public.
The 2007 version of the campaign, which was announced at NAPFA’s national conference here early this month, is fueled by the group’s consumer education program. Initiatives include the launch of focusonfiduciary.com, a website aimed at differentiating NAPFA’s 1,600 members from the competition, a weekly 30-minute podcast with an adviser, an online multimedia presentation and a national letter-writing campaign to Congress.
Arlington Heights, Ill.-based NAPFA this month will distribute eight public service announcements to 300 radio stations about fiduciary advisers. It also will add downloadable posters and fliers to its website for members to distribute to local newspapers.
“Any campaign that educates consumers more about how a fiduciary adviser works is important for all NAPFA members,” said Michael Maye, president of MJM Financial Advisors LLC, a fee-only investment adviser in Berkeley Heights, N.J. “The more educated a consumer is, the better that it will be for NAPFA members in general.”
The marketing effort appears to be working.
According to statistics from the Financial Planning Association in Denver, 60,000 individuals sought out recommendations for a fiduciary last year, a 13% increase from the number in 2005.
“This type of campaign has not been done on a national front, from what I am aware of,” said Peter Vessenes, chief executive of Vestment Advisors Inc. in Shorewood, Minn.
“The consumer market is being drowned in information; the average person understands that they [need] legitimate advice and has grown cautious,” he said.
NAPFA’s initiative comes on the heels of the group’s recent “2007 Consumer Understanding of a Fiduciary Standard Survey Report,” which found that 34% of clients said their financial adviser hadn’t done a proper job of explaining a fiduciary standard.
“Clients are asking all kinds of questions that they have never addressed before,” NAPFA chairman Richard L. Bellmer said at the national conference, noting that clients had never inquired about the specifics about his practices before.
“If an adviser doesn’t have the answers, then clients are going to go somewhere else,” he added.
Mr. Bellmer’s firm, Deerfield Financial Advisors Inc. of Indianapolis, manages $400 million in assets.
Despite advisers’ not explaining to their clients what a fiduciary is, more than 92% of responding clients said that they had heard the term “fiduciary,” and 97% said that they would seek an adviser who followed a fiduciary standard.
Also, 93% said that financial advisers should sign a “fiduciary oath” to demonstrate their commitment to clients and their needs.
The survey, conducted between December and February, polled 922 consumers in 48 states and six foreign countries who received NAPFA’s quarterly newsletter.