Initial Thoughts on the DOL Ruling

Initial Thoughts on the DOL Ruling

First of all, I want to applaud the efforts of U.S. Secretary of Labor Tom Perez and the entire staff at the U.S. Department of Labor (DOL), as well as countless industry advocates for today’s announcement. I hope our industry does not view the DOL’s Fiduciary Rule and Conflicts of Interest as a finish line, but rather a starting point for improving the distribution of our products and services. 

Improvements were clearly made through the comment and discovery phase of this rule. I commend the DOL for following such an encompassing due-diligence process. However, concerns remain about how the rule will be interpreted and put into practice throughout our financial services system. Its vague language will create avenues for conflicts among firms, not just advisors. Advocates for our industry need to continue working to educate our congressional leaders on this rule’s impact and direction of our financial distribution system. 

Without a doubt, our distribution methodologies have become outdated and flawed.

Today’s rule should be seen as an awakening to our industry that technology, innovation and client experiences have to improve. We must define our own future distribution rather than allow someone else to level the playing field.

Our products provide a great benefit to consumers who already seem lost in a myriad of products. Expert advice should, and will, prevail over product commoditization and cost-cutting fundamentals. Those skill sets are not level; instead, they require investment and should be rewarded for the expertise that is delivered.  

During today’s announcement, Secretary Perez spoke of giving our clients the “best chance to win.” I agree. We owe it to our clients, our firms, our industry and ourselves to make sure we put our clients in the best position to win. I have written numerous times about the importance of following a structured sales process that is repeatable and measurable, creating an environment where we can complete a thorough and exhaustive discovery process, make recommendations that improve the probability of client success, and provide routine and consistent reviews.  

Our value proposition is simple and does not need to be complicated with regulation. However, quality advisors are separated from the masses by providing clients with quality education and ideas. If we do, everyone wins. 

Winning Strategy

Look at today’s DOL announcement as an opportunity to evaluate your business.  Focus on the client experience and how you can improve your financial planning process.  

More Information

Watch this webinar replay from April 11, 2016.