Ron Rhoades is a lawyer and RIA with no back-down; the VA industry is finding that out in a hurry
The relationship began with a comment about the ineffectiveness of cosmetics on pigs
5 min read- Identified: Ron Rhoades is a passionate fiduciary advocate and RIA industry thinker.
- Rhoades joins Alfred State to cultivate future financial planning leaders.
- Advocacy: Rhoades challenges industry norms, particularly regarding fixed income annuities.
- Continues: Rhoades will keep contributing to RIABiz and advocating for the fiduciary standard.
About a year-and-half-ago, I met Ron Rhoades at the MarketCounsel conference in New Jersey. He was a speaker; I was a journalist new to the advisory business.
Our meeting led to an e-mail exchange. In response to a simple question about his views on the retirement market, he sent me an e-mail that was both prodigiously long and, in the breadth and depth of thought, amazing.
Brooke and I decided that first off-the-cuff e-mail of Ron’s was good enough to post.
Unwittingly, I’d stumbled onto the man that Knut Rostad, the chairman of the Committee for the Fiduciary Standard, calls a “truly, truly one-of-a-kind in the industry, in his breadth and depth of knowledge, and his energy, and the time that he invests in teaching.”
Ron is an advisor for Joseph Capital Management in Florida, who has become – via an absolute passion conveyed in conversations, e-mails, and letters to the SEC and other regulators — one of the most influential thinkers in the industry on the subject of the fiduciary standard.
Practical edge
Before taking a self-imposed vow of silence, Ron Rhoades sounds off on the RIA industry and tells what's it's like to hit a professional wall
Now, he’s taking that passion to students at a college that’s part of the State University of New York, Alfred State. Starting in August, he’ll be a professor in the school’s Financial Planning Program, his aim being to built it into one of the best in the Northeast. He says he’ll bring a practical edge to his classes.
“We need to foster a next generation of leaders, armed with a greater knowledge of what it takes to be a true professional in these arenas,” he says. “One of the problems both financial planning firms and students encounter, as to new graduates, is the relative inexperience of students. I believe we can tackle this challenge by providing increased internship opportunities with well-defined standards of engagement.”
Knut Rostad: Some people in the
industry may think he’s ineffective because
he’s so adamant.
We are happy to say that he will continue to contribute to RIABiz, and he tells us he’ll continue to advocate for what he says is the true fiduciary standard. He’ll also continue to be an advisor to select clients.
The students will be getting someone unafraid to stand up for what he believes in. Ron has sparked debate on our site (and within the industry) with some of his stands. See: One-Man Think Tank: Six reasons that FINRA should be dismantled and See: Debate continues: Fiduciary standard no panacea.
Story Timeline
Words have meaning
“Ron is fearless and adamant that if the standard is going to mean anything, that you have to be able to do what you say you are going to do,” says Rostad. “He simply suggests that words have meaning and words matter in terms of describing what is required.”
“Some people in the industry may think he’s ineffective because he’s so adamant.”
Where Barbara Roper and Ron Rhoades lose traction in their fiduciary arguments
Most recently, Ron was unafraid to step into thickets of the controversy over fixed income annuities, a type of investment product that had come close to being regulated as a security. Insurance interests blocked the move. See: Regulatory Wire.
For a sense of what Ron was stepping into when he wrote The ABCs of doing due diligence on fixed income annuities, I asked Jefferson National President Laurence Greenberg for his thoughts via e-mail. Jefferson National issues an “RIA-friendly” annuity, which Greenberg says eliminates the asset-based M&E, commission and surrender charges.
Laurence Greenberg: The industry is deeply
entrenched in a traditional distribution model,
built on armies of high-priced wholesalers.
“It is often said that many of these complex products, such as traditional variable annuities, are 'sold, not bought.’ As a result, the industry is deeply entrenched in a traditional distribution model, built on armies of high-priced wholesalers engaged in a features and benefits battle of commission-based products.”
Taking on the army
So Ron took on that army — and what is shaping up to be his vociferous opposition — when he started out his column this way:
Fixed indexed Annuities (FIAs) are now the preferred name for Equity Indexed Annuities (EIAs). Which brings to mind the saying – if you put lipstick on a pig, it’s still a pig.
It probably shouldn’t have surprised us that some writers associated with the insurance business have been taking him on in the comments section of the column.
We’re learning a lot from the back-and-forth – just as Ron’s future students will learn from the debates we have no doubt that he will start in his classroom.
Ron invites practitioners, software firms, and custodian and investment firms with ideas on how to enable students to better progress or who may desire to lend resources to these efforts to contact him. Ron also invites in-person chats, as he will be attending and speaking at the upcoming fi360 and NAPFA National conferences in May 2011. He can be reached at Ron@ScholarFi.com.
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