What You Can Do While We Wait for Answers on the DOL


What You Can Do While We Wait for Answers on the DOL

Since Feb. 3, when the president signed a memorandum asking the Department of Labor to review the Fiduciary and Conflicts of Interest Rule, I’ve talked to agents and advisors from around the county. Many feel a great sense of relief that the rule is likely to be delayed – many believe this is the beginning of the end for the rule.

 

Regardless of a potential delay or revision, I don't believe we can afford to move backward in how we interact with our clients. The fiduciary standard is here to stay – market forces and regulatory agencies already act as if the rule is in effect.

 

I think it’s vital to prepare for running your office as if you are a fiduciary. While we wait for answers on the DOL, you can set yourself up for success by taking a few key steps:  

 

  1. Review your sales process. Make it repeatable and document it. Think about how you interact with your clients. Document every step and turn it into a policy and procedure manual for client interaction. The final product is less important if you follow a consistent process.
  2. Evaluate your vendors. Whether it’s software, fact finding, BGAs, or broker-dealers, are they going to be able to support your business model and help you execute what best supports your client base and growth plans?
  3. Get comfortable with transparency in fees. Most clients will appreciate your plans to remain in the business and continue to stay in contact with them. Don't be afraid to discuss your model and thoughts around compensation.
  4. Listen to your clients. Engage with them however best meets their needs. I don't believe any business model is superior to another so long as your engagement is defined by client need.
  5. Think about your compensation – in relation to time, effort, expertise and what the client is asking to get accomplished. Concentrate on neutrality when defining your fees with a group of clients.

 

These are just the beginning steps to prepare for a fiduciary standard – they represent the fundamental building blocks. As planners, we can’t defer our fiduciary responsibility any further. Instead, we should look at this possible delay as an opportunity to refine our practice and enhance our client experience.

 

Winning Strategy: Take time to prepare for a fiduciary standard. If there is a delay in the DOL rule, you can get your business in a better position for success. Make fiduciary a positive differentiator for you as you look to thrive in our new marketplace. 

 

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.”