New Forces Dramatically Impact Financial Advisors

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The Future of the Financial Advisor Cogent Reports

Regardless of the uncertain fate of the DOL fiduciary ruling, one thing is certain: it unleashed new forces that will dramatically impact financial planning and advice for years to come. With many advisory firms and product manufacturers far down the road in adapting their strategies and communicating these changes to clients, it would be shortsighted for firms to fully reverse course now.

We already see advisors changing their business practices. As advisors move further toward fee-based compensation, predominantly fee-based advisors and RIAs are the only advisor segments that are growing. As a result, we’re seeing advisor-controlled assets gradually shifting toward lower-fee investment products. Compounding the challenge for asset managers, advisors are becoming less receptive to traditional wholesaler outreach and are instead seeking more personalized, on-demand support. Continue reading

Ranks of Fee-Based Advisors Expected to Swell

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Despite the uncertain fate of the Department of Labor fiduciary rule, we already see advisors changing their business practices. According to Cogent’s The Future of the Financial Advisor™ report, advisors earning at least three-quarters of their total compensation from asset-based fees could comprise half (49%) of all financial advisors by the end of 2017, up from 38% presently. This shift toward fee-based compensation is primarily being driven by advisors in the National, Regional and Independent channels. Continue reading