Reverse-mortgage warning is incomplete, inaccurate

Regarding the story in the March 17 issue, "More to reverse mortgage warning?" there are at least three aspects of this warning that are incomplete or inaccurate.

Regarding the story in the March 17 issue, “More to reverse mortgage warning?” there are at least three aspects of this warning that are incomplete or inaccurate.

First, the Financial Industry Regulatory Authority Inc. of New York and Washington doesn’t explain that a reverse mortgage allows you to participate in the appreciation of the house and limits your downside because the money obtained is yours no matter how much the house drops in value.

Second, many homeowners who want to avoid a nursing home can use the reverse mortgage to pay for in-home care.

Finally, I think Finra is referring to equity annuities, but a fixed-income annuity isn’t a bad trade and may have some use for Medicaid planning.

You ought to question it on this.

Peter J. Chepucavage
General counsel
Plexus Consulting Group LLC
Washington

CFPs, advisers, brokers are all fiduciaries

As a litigator who sues financial professionals for a living, I read your interview with Kevin Keller, chief executive of the Certified Financial Planner Board of Standards Inc. of Washington, in the March 17 issue with great interest.

One point I would like to make is that his — and it seems the entire industry’s — fascination with the broker-dealer exemption rule, and other fine distinctions between financial jobs with different names, is grossly misplaced.

Regardless of the regulatory regime that covers them, under the common law, CFPs and financial advisers — as well as brokers — are all fiduciaries, the former two in rendering advice, and the brokers for being agents of their clients in executing trades (and also likely advising them as to what to trade).

Yes, believe it or not, stockbrokers and even real estate brokers, like all agents of their principals, are all fiduciaries under the common law.

The various regulatory schemes are only an overlay that distracts people from the real issue: In virtually all aspects of the financial services industry, the professionals are fiduciaries for their clients.

As such, they must be fastidiously loyal to their clients and place the interests of their clients above their own.

No one is off the hook.

Jon E. Drucker
Partner
Law offices of Jon E. Drucker
Beverly Hills, Calif.