“What's past is prologue” wrote Shakespeare in The Tempest. There are an awful lot of great quotes in that play, but this is the one that many people use in many situations. Of course, this runs counter to everything the SEC requires us to disclose in terms of “past performance” (i.e., it does not guarantee future results).

Think about this for a moment: Where do you see this whole fiduciary thing in five years?

It's tough, even for experts (see “What Will the Fiduciary Standard Look Like in Five Years?” FiduciaryNews.com, September 11, 2018). There are just too many moving parts, not the least of which is the actual voting booth.

The vagaries of the voting booth, however, instruct us as to why we can't (and perhaps shouldn't) rely on regulators and legislators to frame the fiduciary argument. Even when they possess the most honorable of intentions, all it takes are diligent lobbyists to undo whatever good they may have accomplished.

Don't get mad. That's the reality of the rules of Washington. It's not a place governed by agnostic mathematics. You'd be sorely disappointed if you expect the logic of impartial numbers to determine the balance of the scales.

Rather than reason, passion reigns in our nation's capital. And passion isn't stagnant. It ebbs and flows with the regularity of blue waves and red tsunamis.

Quite simply, you can't build a sustainable business model if you have to rely on the slings and arrows of outrageous politicians. (OK, that's Hamlet, not The Tempest.) This makes about as much sense as a naive kindergartner believing everyone on the playground will play fairly.

Perhaps this reliance has been the weak link in the otherwise strong chain of reasoning that supports this concept of consistent fiduciary behavior on the part of financial professionals. Maybe we saw the logic as so compelling, there could exist no argument against it. That's the way many feel. That's the way they still feel.

But that “feeling” doesn't speak to the reality of the rules of the playground. Bullies exist. They've always existed. They will continue to exist. What's past is prologue.

School children quickly learn you don't solve the bully problem by depending on the kindness of adults (despite what some teach). No authority can wave a magic wand and give you self-confidence, mature bearing, and the wits to consistently defend yourself.

You need to do that yourself. That means fighting your own fights. Only then will you know when it's safer to stay down when you're knocked down, and when it's more important to get right back on your feet.

Some cower from pugilistic metaphors. (It's as if they prefer to condemn themselves to an eternity of being bullied.) There are those few, those happy few, who band together and embrace the spirit of competitiveness that defines the free market (sorry, also not The Tempest, but Henry V). They understand what's needed to win the day isn't political passion, but carnival passion.

Rhetorical debate has demonstrated itself unreliable. The real success – and the only success that has always mattered – comes from the persuasiveness of the copywriters.

In this case, the past isn't prologue. The future of fiduciary belongs to the marketer, not the regulator.

Those who dare test their ideas in the open marketplace – to willingly expose themselves to the fierce brunt of their competitors – will be those who discover what audience – what market – prefers the safety of a fiduciary relationship. They'll leave the remaining prospects to their foes.

“O, brave new world that has such people in't!” (Yep, you guessed it. That one's from The Tempest.)

Instant Insights /

The future of fiduciary belongs where it always should have – Carosa

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