Adapting to the New Normal

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Ready or not, the DOL fiduciary rule is here and changing everything. While many product providers and distributors have been preparing for months, the financial advisors they
rely upon are now beginning to feel the effects. Many advisors are regretfully watching their choice of available products constrict as their brokers/dealers eliminate certain products, asset managers and share classes. At the same time, advisors are facing higher hurdles in the form of additional disclosure and product justification, making their job of providing investment advice increasingly challenging.

While the industry’s heightened focus on fees is creating a windfall for passive managers, advisors are boosting their reliance on managed money or model portfolio solutions, effectively distancing the direct link between asset managers and advisors selling their products. This, in turn, is impacting the role of the wholesaler, shifting expectations from that of a product spokesperson to a technical industry expert.

With less reliance on traditional wholesalers, advisors are increasingly turning to technology solutions to scale their practices and expand their capabilities. By harnessing technology to bear more of the administrative and regulatory burden, advisors will be able to offer more holistic financial wellness services such as intergenerational wealth transfer,
life coaching and refinancing debt to further demonstrate advisors’ value over the growing field of robo-advisors. In light of these shifts, there is no shortage of new product introductions by asset managers—particularly in the smart beta and active ETF categories. Yet, while advisors reveal a continued appetite for alpha-generating strategies, product providers are facing higher levels of scrutiny and more stringent due diligence processes from gatekeepers than ever.

In this “new normal,” there is simply no substitute for skill. Asset managers that can set themselves apart through investment team expertise and a proven performance track record are poised for continued success. And in the face of the DOL fiduciary rule, with all the perceived obstacles the new regulations present, product providers have an opportunity to strengthen their connections with advisors by offering practical ideas and suggestions on ways to adapt their business practices and find new ways to flourish.

Download a replay of our webinar, Advisors Adapting to the New Normal, for a look at more findings from this year’s report.

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This entry was posted in Brand and Messaging, Financial Services by Meredith Lloyd Rice. Bookmark the permalink.
Meredith Lloyd Rice

About Meredith Lloyd Rice

Meredith Lloyd Rice is a vice president in Market Strategies' Syndicated division. She manages the firm’s syndicated research products focused on the financial advisor market and is the lead author of the Advisor Brandscape® report. She has more than 15 years of experience managing research initiatives in the wealth management industry and has explored a wide range of business issues on the client and supplier side. Prior to joining Market Strategies, Meredith was an associate VP at Chatham Partners where she oversaw a team of researchers and managed the overall design, analysis and interpretation of large-scale studies for institutional financial services clients. Meredith earned an MBA from Thunderbird School of Global Management and a bachelor’s degree from Colgate University. She is a former collegiate rower who now gets her exercise chasing after her 2-year-old daughter and Clumber Spaniel.

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