November 14, 2016
The BIC is SICK
Words are weapons. They are used to persuade, manipulate, cajole, comfort, and coax people in a desired direction all the time. If you want proof, take a look at the recent election cycle. Words are powerful weapons.
I think everyone has heard the phrase “The pen is mightier than the sword”. According to Wikipedia, Assyrian sage Ahiqar, who reputedly lived during the early 7th century BC, coined the first known version of this phrase. One copy of the Teachings of Ahiqar, dating to about 500 BC, states that “The word is mightier than the sword.”
One such weapon is the euphemism. From Wikipedia, a euphemism /ˈjufəˌmɪzəm/ is a generally innocuous word or expression used in place of one that may be found offensive or suggest something unpleasant. Euphemisms can be intended to amuse; or downplay offensive terms to sound more politically correct.
For example, “Collateral Damage” is a general term for deaths, injuries, or other damage inflicted on an unintended target. In military terminology, it is frequently used for the incidental killing or wounding of non-combatants (another euphemism for civilians, or innocents) or damage to non-combatant property during an attack on a legitimate military target.
Additionally, the “unintentional destruction of friendly targets (allies) is called “friendly fire.”
Euphemisms are used to intentionally make something “bad” sound less bad, or even good. Tricky, tricky.
Now, let’s examine the upcoming 2018 Fiduciary Standard requirement exemption. This exemption was put in place to ensure that investment recommendations provided to you by your financial broker can circumvent the Fiduciary Standard (the one that holds the advisor legally responsible for ensuring all financial recommendations that are made are done so in your best interest). Unfortunately, this still allows your financial advisor to sell you financial “garbage” that enhances their own pocketbook.
That’s right. The Best Interests Contract Exemption rule, A.K.A the BIC, is the Financial Service Industry’s euphemistic response to the new Fiduciary Standard, slated for enforcement in 2018 (why do we have to wait that long). How do I know the name is a euphemism? Even the acronym, BIC, suggests that it is. Notice how BIC isn’t BICE? The naming drops the “exemption” word and just calls the document the Best Interest Contract. Neat, huh?
So, Best Interest Contract is a euphemism for “selling you a financial product that is not in your best interests”. How can I know this? Logic. If the product was in your best interest, you wouldn’t need to sign a contract to the contrary… You’ve been warned.
So, in the future, if you are given the opportunity to sign a BIC, you agree you are, “a rube, and I fully trust that you, sales broker, are selling me an investment product based on your recommendation KNOWING that you are either:
A) Incompetent and unwilling to go to jail (get sued), or
B) Knowingly making money selling “garbage” financial products to line your pocketbook.
So, in the future (2018), if you are asked to sign the BIC, or Best Interest Contract, it is the equivalent of willfully walking into the war zone to become Collateral Damage or Friendly Fire. If you don’t want to be Collateral Damage or Friendly Fire, maybe you should call a Fiduciary, like Gainplan.
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