The DOL fiduciary rule and client experience

February 24, 2017 by Logan Lee

A gavel representing regulation and the DOL fiduciary rule

About the author:

Logan Lee

Vice president, U.S. sales

He has been at Advicent for over three years and has enjoyed learning more about advisors and their businesses. He is especially passionate about helping advisors understand the importance of financial planning and client communication.

The current state of financial services regulation in the U.S.

The anticipation of the Department of Labor fiduciary rule is still top of mind for those in the financial services industry. Is it possible that compliance, regulation, and the governing of this industry have taken the back seat for years? Now, financial services regulation—specifically regarding how they treat their clients—is in the forefront.

While there are many ramifications for the compliance strategies of financial services firms, this regulation focuses on the consumers and their financial future. Consumers will benefit from those who stay the course and bring change to their organizations to focus on the client’s best interest. “Refining the customer experience will be the main driver for technology that drives core transformation, digitization, and automation,” Deloitte says. “As technology upgrade cycles continue to shorten, banks may finally demonstrate a willingness to retire legacy systems for cloud-based platforms.”

The uncertain future of the DOL fiduciary rule

In the coming years, it will be interesting to track the effect the DOL rule has on client experience. Whether the rule is ultimately repealed or simply remains delayed, consumers will begin to demand higher levels of transparency and collaboration to ensure their best interests are upheld. Whether you are an independent advisor or a large firm with thousands of advisors, this will affect your client experience.

Imagine being at the bank with an insurance representative or on your mobile phone reviewing weekly account transactions. These are touchpoints at which you may consider changing your client experience; the look, the feel, and the way in which is encourages clients to act. Specifically, more and more firms across the financial services industry will have to raise their standards and adopt new technology to keep up with the competition.

On the other hand, the DOL fiduciary rule poses several changes for those professionals that it effects in the financial services industry. According to InvestmentNews, “When Mr. Trump was inaugurated; the financial industry had high hopes that delaying the DOL rule would be one of the first items that the new president addressed.”

The first change is an investment in the business to make sure it is doing everything possible to be a fiduciary — which many firms have already done. The good news: This investment will only enhance the service your firm provides regardless of the status of the fiduciary rule. Another item organizations will have to face is changes to their technology stack. Technology changes can be great for firms as long as they have the proper plan to implement it. The third item is the continual refinement given the uncertainty on what ruling is coming next in the financial services industry. Whatever the final ruling may be, there is a fundamental global change happening in the financial services industry that expects more focus on the consumer.

Click here to learn more about how Advicent technology will not only empower a firm’s compliance strategy but also its client experience.