The Post-DOL world is here. Despite delays, certain elements of the fiduciary rule are already in place.
With full implementation scheduled for July 2019, figuring out how to deal with the fiduciary rule is the top priority for many firms and advisors. Here's how you turn this regulatory bombshell to your advantage.
Don't Fight the Inevitable
Many of the largest investment managers have already made changes to comply with the fiduciary rule. For example, Bank of America Merrill Lynch (BAC) moved clients from commission-based accounts to fee-based ones. Fidelity has been aggressive in positioning itself as a fiduciary to retirement plan participants. The industry is moving towards a fiduciary standard, and soon a fiduciary level of service will be required to acquire and retain clients.
Win More Assets and Keep Them Longer
Most everyone is familiar with the Duty of Loyalty portion of the Fiduciary rule, while few understand the Duty of Care. Stand out versus your competition by showing expertise on the most important part of the Fiduciary Rule. Show clients that, despite the ambiguity surrounding the Duty of Care, you understand how to take care of them properly when it comes to investment advice.
Avoid Regulators' Scrutiny
In our meetings with wealth management executives and advisors across the country, the biggest concern we hear is:
“When I/we get pulled in front of an arbitration panel, how will I/we justify my recommendations.”
This concern is understandable given the conflicts endemic to sell-side research and the lack of rigor in technical research.
Now is the time to upgrade your practice to leverage research that can stand up to regulators' scrutiny and impress clients with your diligence.
Impress Clients with Thought Leadership on the Duty of Care
Despite the lack of regulatory guidance for fulfillment of the Duty of Care, there is plenty of common-sense guidance from thought leaders such as wealthmanagement.com, MarketWatch, Michael Kitcesand Kim O'Brien, CEO of Americans for Annuity Protection. They all agree that research that fulfills the Duty of Care should be:
