As you read this, the financial services world is changing. Regulatory pressure accelerated a shift over the past 12 months; however, the current state of fiduciary status was inevitable. Our clients were beginning to demand it, and today, we have to deliver it to even stay in the game.
The challenge, and the main reason to really think about your business in 2018, is to remain relevant with your clients and prospects through the fiduciary standard. The firms that grow will be the ones that not only adapt to the fiduciary rule, but also find ways to differentiate themselves from the rest of the fiduciaries in the marketplace.
Your value in the market place will never be defined by your broker-dealer or regulation. Value is determined by how much you deliver above the cost of your services. That’s not to say that the U.S. Department of Labor’s rule won’t likely affect how broker-dealers form your commission schedules. But, your level of commission doesn’t determine your value. It’s how much you deliver to your clients.
Value is about the client experience. How you deliver your expertise may be more meaningful than the information itself. Clients want to have information now. It must be accurate. It has to be timely. And, it must be easy to understand and digest.
Value is also delivered by those items that clients truly value. Asset allocation is becoming – or has been for some time – a commodity. It has been outsourced by third-party money managers, computerized, and easy to access via the Internet. In order to drive value above your current pricing, you need to find other topics that are important to your clients.
Retirement income is a nearly irrevocable decision. You only get one chance to get it correctly. If your client begins running out of money, it’s usually too late to correct the path. Income planning requires expertise, tools, and understanding of the emotional impacts of a variety of external factors. Robo advisers are not equipped to handle this in-depth conversation and complex problem.
This is where you need to plan for 2018 and beyond – by reshaping your business for maximum success in the future. It’s no longer OK to simply bring on new clients, apply an asset allocation model, and monitor the assets. You have to think about the demographic shift happening in the United States and the impact on your planning in order to stay ahead.
If you are going to drive value – the ability to give more than you receive from your clients – you have to offer more. That doesn’t mean several more services. Instead, it means identifying what’s important to your clients and delivering with the highest client experience possible.
You need to evaluate the technology, products, services, and processes that will guide you and your clients through the discovery and planning process. Look at the talent level in your office to deliver on the changing needs of your clients, and find partners who can assist in delivering new solutions. Taking a step back and looking at your office in the fourth quarter can make a huge difference for many years to come.
When setting goals and planning for next year, take a deeper look. Evaluate the process, the talent level, technology, and the client experience. Make sure you are making a difference that adds value to your clients’ overall client experience with you.
Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of retirement 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.”
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