Disruption #6: Client Expectations 

“Clients have every right to expect personalized, institutional-quality portfolio management plus financial planning. Financial planning will be the distinguishing feature vis-a-vis online advice firms.”

Chip Roame; Tiburon

Transparency will make it impossible to charge a human price for what a machine can do. The opportunity is for smart, nimble advisors to shift to getting paid for the value of what only the human can do. The machine is better at the technical hard skills. Successful human advisors create an ongoing experience that the client is willing to pay for above and beyond what the machines do. These are the soft, or “people,” skills. In the new world, the soft skills are what generate the hard cash.

As clients’ expectations change, be crystal clear about your value promise
in this new and disrupted world.

The human value is: Planning. Advice. Accountability. 

Disruption #7: The DOL Fiduciary Standard

“The real worry is that these new rules and regulations create a risk factor or a timidity that is so severe that ... [businesspeople] sit on the sidelines worrying more about rules and regulations than they do about making money.”

Thomas Donohue, president of the U.S. Chamber of Commerce


Doesn’t the fiduciary standard simply mean that we put our clients’ best interests first? Haven’t we always done that?

Yes, that’s what it means. Many advisors are probably not doing this to the degree that complies with the DOL fiduciary standard (at least in part because the rules aren’t final yet).

More disclosure, more transparency, more paperwork, more supervision, more risk, more expense and more uncertainty have many firms and advisors on the back foot.

Our government believes consumers are being taken advantage of by our industry. They believe that most consumers don’t understand what they’re getting and how much it costs. They believe the solution is absolute transparency, full disclosure and the elimination of conflicts of interest. They don’t like bonuses, contests, rewards, trips or perks of any kind. They view financial services more like a profession rather than a typical salesforce with incentives for hitting sales targets or quotas.

To learn more, check out www.fi360.com or Google “Fiduciary Standard for Financial Advisors.”

Given the magnitude of these disruptions, is this a great time to be a financial advisor? Yes! People need help with their money and the universal principles of success have not changed. If you’re willing to adapt and do the work, you can succeed at whatever level you choose. You can adjust your behavior and your business model to be highly successful in our disrupted world. Somebody’s going to do exactly that. Why not you?

This article is excerpted from the new eBook: How to Thrive in the New World of Robo-Advisors, DOL Fiduciary Standard, and the 5 Other Critical Industry Disruptions. Financial Advisor magazine readers can receive a complimentary copy by e-mailing [email protected]; subject: ebook. 
 

To learn more about how Bill and his team can help you be a more direct and candid communicator who helps clients make better decisions, schedule your Business Accelerator Meeting today. 858-558-3200/www.billbachrach.com

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