The trend is not always your friend, and seizing opportunity is hard work.
With 2017 already well underway with a boom in U.S. equities and a dizzying array of political headlines, there are a number of trends that financial advisors should be aware of moving forward.
Joshua Pace, president and CEO of Colorado-based custodian Trust Company of America, and Matt Sommer, vice president and director of retirement strategy at Denver-based Janus Capital, have identified five trends that advisors can use to differentiate themselves.
No. 1: The Fiduciary Standard Will Trump Politics
Though opponents continue to attempt to delay or block the applicability of the Department of Labor’s fiduciary rule, Pace believes that Americans’ assets are likely to continue moving from commission-based products to those that charge low fees.
“There’s a land-grab of assets occurring right now at the highest level. It isn’t just the industry that’s moving, the consumer is moving away from commissions towards more DOL friendly, conflict-free, transparent-fee products,” Pace said. “Advisors have a fair amount to gain from this movement, as long as they’re marketing properly and emphasizing that they’re attached to those fee-based assets.”
Advisors are following the consumer toward more fiduciary-like offerings, says Pace, and fund managers are beginning to offer more fee-driven products.
It may be impossible to put the fiduciary genie back in the bottle, Sommer says.
“At this point, the industry has gone too far down the road of changing business models … and the fiduciary standard is likely to be the new normal,” says Sommer.
Increased fiduciary awareness could work to the benefit of independent advisors whose service models already align with the new regulation, says Pace.