As DOL Fiduciary Rule Sits on Ice, Is It Thumbs Up or Thumbs Down for Advisors?

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While the Debate Continues, the Upside of the Ruling Lies With the Investor


Whether the Department of Labor (DOL) fiduciary rule continues to be delayed, eventually takes effect or ends up being repealed, the proverbial beans have been spilled, as many advisors and their respective firms have already taken the actions needed to comply, thus proving some areas of debate true and others false.

Here are the facts: more than one-quarter (27%) of all affluent investors and over one-third (36%) of advised investors—those currently working with a financial advisor—are now familiar with the DOL fiduciary rule, which expands the definition of an investment advice fiduciary. Among those who are familiar, most (74%) have taken action in the form of talking to their financial advisors, reading about the topic online, discussing the ruling with friends and family and/or reviewing the fees paid for the investments they own. Yet, only 4% have considered changing advisors, debunking the myth that the fiduciary rule has the potential to impose heavy churn on advisors’ client base, and suggesting that there’s more than meets the eye to the investor-advisor relationship. Continue reading

Advised Investors Feeling Hopeful

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EmojisAffluent investors had an interesting start to 2015 with the S&P 500 experiencing a bumpy January, strong February and blasé March—all with only a 1% gain to show, which was better than the Dow’s 0.3% increase from the end of 2014. These investors were (and still
are) surrounded by a lot of talk about global monetary easing and uncertainty in policy direction. All the while, our $100K+ investors heard seemingly good news for consumers in the form of lower oil prices and a stronger US dollar. But as any good therapist would ask, how did all of that make affluent investors feel?

The answer is mixed. Using our Cogent Beat™ Investor portal, we examined investor sentiment and feelings about the current environment to find out how investors perceived the markets on a set of emotions ranging from ecstatic to panicked in Q1 2015. The top two-cited emotions were uncertain (35%) and hopeful (34%). Furthermore, more than one-third (38%) register at least 2 emotions, with the top combination of responses being hopeful and optimistic. Continue reading

Relationships with Investors: It’s a Matter of Trust

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It is 1986 and singer Billy Joel is crooning his latest hit, “A Matter of Trust,” a song about why it is going to be different this time in a relationship. “The closer you get to the fire, the more you get burned, but that won’t happen to us…it is a matter of trust.”

All told, lack of trust occurs in romance as well as in advisory relationships. Investment firms and advisors work to gain trust among clients and can lose it twice as fast. And it takes a lot of effort on the part of financial services companies and advisors to achieve and maintain trust—awareness, consideration, impression, responsiveness and performance. As such, affluent investor attitudes toward trust in the financial community are an important gauge to track for distributors and product providers as well as financial advisors. Continue reading