Whether the Department of Labor fiduciary rule is implemented on time or not, the rule has already had an impact on advisors and advisory firms, says Bill Morrissey, the managing director of business development at LPL Financial.
Advisors and firms are consolidating partially because of the support they will need to implement the DOL rule, which requires advisors working with retirement plans to act in the best interests of their clients, says Morrissey, a thought leader in the financial services industry.
That trend will continue this year and probably accelerate, he says.
“What a year 2016 was. It was definitely interesting,” says Morrissey. “There are several trends that were apparent last year that will continue in 2017 that should be of concern to advisors.”
Besides the DOL rule implementation, which may be delayed beyond April by new President Donald Trump, the aging population of advisors also will push many to consolidate their practices.
“Investors want more transparency and lower fees,” says Morrissey. “This is a trend that will not change no matter what happens to the DOL rule,” he says. “LPL has been planning around the implementation of the rule for 18 months, and this work will continue no matter what because it is in the best interests of the client.”
Advisory practices have been evolving to include much more than money management, Morrissey says. In times of uncertainty, investors turn to advisors for assistance, and given the global and national changes, the uncertainty will continue.
“Advisors will have to keep clients from making spur-of-the-moment, catastrophic decisions about their investing that derails them from their long-term goals,” he adds. “It will be the role of the advisor to make sure clients have a well-developed portfolio.”
LPL is an independent broker-dealer that includes 14,000 advisors.