Meeting the regulatory requirements of the future and accommodating the shifting preferences of consumers doesn't have to be an either-or proposition.
Firms should be able to build Reg BI-compliant technology platforms that can either perform or complement critical tasks, including data aggregation, financial planning and robo support that augments (but not replaces) the value of a human financial professional.
Call it killing two birds with one stone or getting the most bang for the buck. Whatever idiom you'd like to use, leaders should view these two pressing needs as a unique opportunity to invest in technology that will yield long-term value for firms, financial professionals and their clients.
Transparency, Trust And Credibility
To be clear, we didn't need a batch of new regulations to understand what clients want. Anybody in the industry today appreciates very well that they need more help to understand what they are paying for and how it will help them.
Still, the fact that Reg BI requires better transparency and disclosure bolsters the argument that firms should invest time and resources toward realigning their operations, technology and infrastructure to make them more practical and to achieve greater openness. Such an approach will pay dividends for financial professionals in the long run as they strive to build trust and credibility with clients.
Real leadership is not about reacting in a piecemeal way to internal and external forces that impact our business. Instead, what advisors should expect of their firms is a willingness to examine the broader business environment with an open mind, and try to predict how it will evolve. From there, it's about investing in solutions that will make a difference to the ability of financial advisors to serve their clients well, while always being mindful of the risks.
Reg BI clearly comes with some new expectations for financial professionals and firms. Many of those expectations, however, are the same things retail investors have been bellowing for in recent years. The time to bring these regulatory and consumer trends together in ways that best support financial advisors and how they serve their clients is now.
Jamie Price is president and CEO of Advisor Group, one of the nation’s largest networks of independent wealth management firms, comprising FSC Securities Corporation, Royal Alliance Associates, SagePoint Financial and Woodbury Financial.