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Exclusive Interview: Harold Evensky on Fiduciary: The Name is the Game

Exclusive Interview: Harold Evensky on Fiduciary: The Name is the Game
January 17
00:02 2018

Over the years we have gotten to know Harold Evensky very well, both through following him through the press and in our own discussions with him. Often referred to as a “dean” among financial advisers, he has experience in both the practical and academic worlds. He is Chairman of Evensky & Katz, a fee-only wealth management firm and Professor of Practice at Texas Tech University. He holds degrees from Cornell University. Evensky served on the national IAFP Board, Chair of the TIAA-CREF Institute Advisor Board, Chair of the CFP Board of Governors and the International CFP Council. Evensky is author of The New Wealth Management and co-editor of The Investment Think Tank and Retirement Income Redesigned.

FN: First off, Harold, congratulations on receiving TD Ameritrade’s Fiduciary Advocacy Award last year. Your body of work is well known, well appreciated, and well recognized. Thinking back on your decades as a financial professional, what’s the one thing you learned as a civil engineer and Florida home builder that helped you most in your transition to the financial planning industry?
Evensky: Don’t count on stable markets. It was interest rate volatility; i.e., one day tons of money available for mortgages at reasonable rates and the next no money at any rate.

FN: We last time spoke with you in 2014 and much has changed in the industry since that time. Let’s start with the years-long process that eventually led to the unveiling of the DOL’s Conflict-of-Interest (a.k.a. “Fiduciary”) Rule in 2016. In what ways did the process prove to be successful? What might you have done differently in the process and why?
Evensky: So far it has not been very successful from a regulatory stand point but very successful in bringing the issue to the media and public’s attention. As for what could have been done differently, I’m afraid I have no idea as the problem is politicians and I don’t have an answer as to how to overcome their primary motivating force – being reelected.

FN: Speaking of the Fiduciary Rule as original released in its final form, where do you see its greatest strengths? What were its potential weaknesses?
Evensky: The greatest Strength is the requirement of a REAL fiduciary standard for anyone providing financial advice. On the other hand, it’s greatest Weakness is putting a square peg in a round hole; i.e., allowing for commissions.

FN: Now that we’ve had new administration thoroughly examine the Fiduciary Rule with a new set of eyes, where do you see it heading?
Evensky: Nowhere

FN: Lately, the SEC has increased talk about its own Fiduciary Standard. In what ways is the SEC’s perspective on this different from the DOL’s? What does this say about the prospects of harmonizing the standard between the two regulatory arms?
Evensky: I’m not very optimistic. The SEC is much more politically oriented. As for harmonization, that’s an euphemism for ‘water down.’

FN: In many ways, the original concept of creating a uniform fiduciary standard dealt with leveling the playing field between professional service providers who, while offering what appeared to be the same service, fell under different and incompatible regulatory regimes. Why was this unlevel playing field unfair? How did it benefit some professionals and how did it harm other professionals?
Evensky: The unlevel playing field is unfair as it allows those practitioners held to a caveat emptor level regulation to present themselves to the public as fiduciaries.

FN: The term “adviser” and “advisor” are used interchangeably in the marketplace. What’s the difference between them? How does this confuse customers?
Evensky: There is no practical difference between the two in the eyes of the customer. Both suggest a level of relationship well beyond the standard of a brokerage relationship.

FN: What do you see as the best way for true fiduciaries to overcome this confusion within the market?
Evensky: Nothing short of the SEC controlling the use of titles. That’s currently a major effort of the Committee for the Fiduciary Standard. Click here the Committee’s January 12, 2018 letter to SEC Chairman Jay Clayton on this.

FN: Changing to other topics, we see growing discussion concerning the prospects of Congress finally taking action to approve open 401k MEPs. How might this help bring company sponsored retirement plans to more employees, in particular, those working for smaller companies that currently have a hard time providing a retirement plan?
Evensky: I must admit to limited familiarity with the MEP movement but, at least on the surface, it would seem to be an attractive concept as “pooling” would potentially allow for significant cost benefit for small firms offering a plan.

FN: What concerns do you have with state-sponsored retirement plans for private employees? How might these issues be alleviated (assuming they can)?
Evensky: Again, limited familiarity but my major concern would be defaulting to state government management versus independent professionals. As you can tell, I’m a bit wary of politicians.

FN: What do you see as the primary advantages of having children save through an IRA and what do you think can be done to encourage more parents to help their children establish a Child IRA? [Ed. Note: You can read more about it here: – just scroll down below the sliding picture and click the links to the relevant articles.]
Evensky: Compounding! Obviously the earlier funded the better. What might be done? Education of the parents regarding the potential long-term benefits for their children.

FN: Do you have any other thoughts or ideas you feel our readers might benefit from?
Evensky: I would just reemphasize the importance of controlling the use of titles.

FN: Harold, on behalf of the readers of, let me again congratulate you on being awarded TD Ameritrade’s 2017 Fiduciary Advocacy Award. As usual, your thoughts have been a fountain of common sense, reflecting both your strong experience and passionate philosophy. Thanks for sharing that with us and we look forward to seeing how your advocacy helps retirement savers!


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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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