Written by: William Crager | Envestnet
It is probably a bit of an understatement to say that there is some uncertainty in the near future, for financial advisors. Following the recent election, once the markets evened out, the big question I kept hearing was about the fiduciary rule. Will President-Elect Trump’s cabinet decide to overturn the ruling? Do advisors still need to worry about these new regulations? Right now, it’s unclear, though most experts are weighing in that there is almost no chance of the rule being overturned before it becomes active in less than 80 days.
But I think there is a bigger question here that is being ignored – whether the rule is delayed, revised, or held, is there any reason for advisors to stop preparing for the future?
Regardless of your opinion of the fiduciary rule, one thing is clear: the rule is very much in line with the expectations and needs of the modern investor. People are changing, as they always do. Rescinding the fiduciary doesn’t mean it’s safe or smart to go back to business as usual. There are other changes in play that are altering the status quo. Investors are clamoring for the technology, transparency, and trust that the fiduciary is designed to provide. Today, advisory firms have the opportunity to use these technologic catalysts to transform their practices into businesses that tap into the needs of the new investor.
In the past, I’ve written at length about the unique value proposition a traditional advisor brings to the table. In short, it comes down to humanity, trust, and relationships. Building a lasting partnership – a friendship – between advisor and client. That kind of trust requires the right tools, the right mindset, and an awful lot of work. But, those advisors that put in the work, that manage to provide the greatest demonstrated value to their clients, are the ones that become the successful advisors of the future.
There’s no magic formula for success, but the ingredients are simple. Advisors need to be able to identify what it is that today’s clients want and need. They need to be familiar with the tools and technology required to provide those solutions. Finally, they need to be able to demonstrate how those tools help build efficiency, speed, and returns. Regardless of what happens with the fiduciary on April 10th, those three facts remain true.
Remember, you are your clients’ ally. As external market forces continue to drive change in the way advisors deliver advice, we all need to be prepared to change along with them. Discover what it is that your clients are searching for, and establish yourself as a business capable of providing them.