Winning with New Regulations

Winning with New Regulations

The proposed rule from the Department of Labor takes up a lot of conversation these days. While we await the final rule, it’s clear that we are likely to be acting in a fiduciary role soon. Many have predicted lower sales and as much as 25 percent of the sales force shrinking. However, with any change, there is opportunity to capture additional market share – even with increased regulation. 

A large advice gap exists in the United Kingdom, where similar legislation went into effect in 2012.  Many financial institutions moved up market as they did not find the mass affluent market profitable.  Unlike in the United Kingdom, we will still be able to write commission-based products. Let’s not lose sight of that fact in the conversations surrounding the Department of Labor. For those financial professionals who can work efficiently in the mass affluent, there will likely be opportunity to thrive in the post-DOL world.  

It will take efficiency and effectiveness – two business building blocks – in order to succeed in this market with the proposed regulations. Professionals earning a commission must be able to repeat a sales process with every client to assure the planning process remains holistic. In order to capitalize on the opportunity that involves key components in the proposed rule, in 2015-16, you must think about strategic maneuvering: 

  • What level of staffing will help me in the post-DOL era?
  • How can I easily document all of my client interactions, client conversations, client goals, and case-specific data that leads to my recommendations?
  • What software will I need to show I am working in the best interest of my client while remaining carrier/fund/investment agnostic?
  • How can I repeat the sales process efficiently, and with care, to create scale in my office?

Bottom Line

New regulation does not mean you automatically have to change your business plan to a fee-based or assets under management model. However, it will require some thought about how to take advantage of some of the opportunities. I urge everyone to begin the thought process around a post-DOL Conflict of Interest era. The plans you make today are likely to help you and your clients succeed in the future.   


Mike McGlothlin is the Executive Vice President of Annuities at Ash Brokerage. His strength is helping advisors become more efficient and effective in their businesses. He and his team provide income-planning solutions focused on longevity and tax efficiency, and they also assist advisors with entering defined-benefit termination planning and structured settlement markets.