Harriet Davies
Editor - Family Wealth Report
1 August 2012
Daily News Analysis
John Bogle, the investment industry giant and founder of The Vanguard Group, is to serve as senior chairman of Advizent’s independent board of standards, charged with developing a concise set of standards of excellence for all investment advisors.
Steve Lockshin, chairman of Convergent Wealth Advisors, and Charles Goldman, former head of the RIA custody units at Schwab and Fidelity, announced the formation of Boulder-based Advizent in the spring. It is a for-profit consortium of advisory firms designed to pool resources to create brand awareness for independents, challenging the dominance of Wall Street and major international financial services firms.
Taking up his role at Advizent, Bogle will work on developing standards “that embody the best practices of true fiduciary advisors,” the membership organization said.
"I have worked for over sixty years to give investors a fair shake. Yet, there is still too much talk about what the industry needs as opposed to what investors need. Setting and enforcing a set of high standards that clearly meet the investor's best interests is what clients deserve," said Bogle.
"The individual investor needs straight talk about who is a fiduciary and what fiduciary advice means,” he added.
Indeed, many industry commentators bemoan the lack of consumer understanding about the different standards various advisors work to, despite the growth of the independent advice industry. As Jeff Spears, co-founder and chief executive of Sanctuary Wealth Services, told this publication, working to a fiduciary standard should be a competitive advantage but in reality many clients don’t understand the difference and tend to assume all their “advisors” have to meet such a standard.
A louder voice
The addition of Bogle to the standards board is an early coup for Advizent, as his position and reputation – having founded a mutual fund company which went on to gather well over $1 trillion in assets – is an early sign of the way the firm is looking to give the independent industry a much louder voice. Bogle has also authored many books and papers, and Fortune designated him as one of the investment industry’s four “Giants of the 20th Century” in 1999.
Lockshin recently discussed Advizent’s plans with Family Wealth Report (view here), saying he hopes to build brand awareness around member firms in a similar way to that achieved by Relais & Chateaux in the luxury hotel field.
“As a consumer looking for a high-end hotel that is independently owned and operated I know that if I go from one Relais hotel to another around the world I will be guaranteed an exceptional experience… We’re very much the same in that we’ll be creating an exceptionally high standard and holding member firms to that standard,” he said.
As such, member firms meeting the established standards will be allowed to use the Advizent "mark."
Commenting on the board which is charged with creating the standard, Lockshin said every member would be "completely independent and without conflict."
