Crossing the Threshold to Fiduciary

Crossing the Threshold to Fiduciary

Implementation is here. The U.S. Department of Labor did not pursue another delay to its fiduciary rule, and the deadline has come to pass. Even though many people in our industry would have preferred more time, I believe now is the right time to refocus our attention on our clients. The fiduciary rule will be a change, but the transitionary period offers relaxed rules in order to comply.  


For the past 14 months, I have been writing about redefining your business. Now that we are crossing the threshold to the rule, my message is the same. This transitionary period offers a chance to continue the thought pattern around how your business should look in 24-36 months.


I have always thought there are two key questions that you need to ask yourself:

  • Do you want to move up market?
  • Do you want to remain in the same market and become more efficient?


Regardless of the final rule, revisions or revocations, your business will need to look differently than it does today. The marketplace is demanding more holistic planning and a fiduciary mandate. The real question is:

How do you rise above the other fiduciaries who are born out of regulation?


I think you separate yourself by the way you segment your client base, the services you provide, and frequency of services you provide to your top clients. If you move up market, you will need to really concentrate on segmenting your business and making sure there is a successor to your less than “A” clients. Additionally, you will need to make sure you have the right resources around you in order to compete in the higher net worth market place. 


According to an American Institute of CPAs/Harris Poll in March 2017, 88 percent of Americans worry about running out of money have having to return to the workforce. If you redefine your business to focus on guaranteed income and longevity issues, I think you will have an opportunity to thrive in a fiduciary world and create differentiation between you and other planners. 


Winning Strategy

Take the transitionary period of the DOL to redefine your business and shape it to how you want it to look in 24-36 months. Take steps now to differentiate yourself based on our aging population’s concerns.  


About the Author

Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of annuities at Ash Brokerage, he heads a team providing income planning solutions focused on longevity and efficiency. He’s also a thought leader who provides guidance and assistance for advisors and broker-dealers navigating marketplace and regulatory changes. You can find a collection of his blog posts in his book, “Above the Clouds … Winning Strategies from 30,000 Feet.”