Utilizing technology to comply with the DOL rule

April 7, 2016 by Alex Peter

Financial advisor meeting with a young couple at their home utilizing technology to stay compliant with the DOL rule

About the author:

Alex Peter

Product marketing strategist

Alex began his career at Advicent as a mid-market business development representative. He now divides his time between assisting his team and working with enterprise clients. Alex is passionate about FinTech and creating success for his team.

The sporadic weather in Wisconsin and the rest of the Midwest is no surprise to anyone this time of year. This past weekend, we had a snow storm in Milwaukee, and then I was wearing shorts and laying in my hammock two days later. It is always strange how fickle the weather can be around here.

This quick 180-degree change in weather got me thinking about a lot of things: baseball season is almost here, summer movie blockbusters are around the corner, grilling, and oddly enough the DOL fiduciary ruling. I was thinking about how different financial firms are going to have to adjust to this changing regulation. This led to thinking about how they could adopt technology that would keep them ahead of the ruling, while managing to maintain or expand their client-base.

Negative reactions to the DOL rule

The DOL rule is simple on the surface – any entity that is providing investment advice for a retirement plan for a fee will need to follow a fiduciary standard. It is extremely complex when you really dig into it, but this ruling is designed to protect the consumer and their investments from exploitation from the firm who would be selling them an investment vehicle.

Many firms and advisors will see dwindling revenues from certain commissions that they might otherwise receive. This means that smaller accounts will become cost-prohibitive to manage, and the investors will be without investment advice. This seems like a lose-lose situation; investment advisors lose clients and those clients do not have anywhere to go for advice.

The problem with this view is that it is not taking into consideration the technology that is available to advisors and their clients. Of course there are automated investment platforms (robo-advisors), but that is another discussion for another time.

I am talking about a scalable technology platform for advisors that allows them to minimize onboarding time, maximize client engagement, and create more efficient processes that the firm can employ from an operational standpoint. This tool should utilize financial planning as a way to provide current and future clients with compliant investment solutions.

Meeting advisor and client needs with technology

Advicent has created Narrator™ – an API-driven tool – that allows a firm to tell its unique story while maximizing the efficiency of the onboarding process, creating a centralized hub for the financial lives of its clients, and streamlining other behind-the-scenes processes.

Using a technology-unifying platform, such as Narrator, in the collaborative process allows a firm to create a tremendous amount of value for all of its clients by giving advisors and their clients the tools they need to be successful. This collaborative experience will enable the defense of recommendations required by the DOL ruling.

With the changing regulation, planning revenue will replace much of the current commission and fee revenues that many advisors utilize today. So it is important for an advisor to be able to efficiently handle more clients through an easier process provided through the implementation of cutting edge technology. In turn, clients are pleased because they are able to have a hub for their financial information that is convenient, updated every evening, and easy to understand. This ends up leading to more referrals from satisfied customers.

Click here to learn about Narrator and the other industry leading financial technology solutions offered by Advicent, or call (855) 885-7526 to speak with an Advicent representative.