Market Strategies International


DOL Ruling: Now that Investors Know They Want to Work with a Fiduciary

With trust in the financial industry among investors at an all-time low (32%), the DOL fiduciary rule may be a surprising savior to many financial advisors (FAs) and asset managers. These and other findings are from Cogent Beat™ Investor, the online investor portal from Cogent Reports™ at Market Strategies International.

The delay of the DOL fiduciary rule has significantly increased investor awareness of the debate (36%, up from 27% in January), and consequently, three in four (73%) investors familiar with the ruling state that they would want to work with an FA that is a fiduciary. Additionally, advisors stand to gain from the rule as well, because 27% of affluent investors who were made aware of the rule have said their perception of their advisor has improved.

“The debate is over, and the interesting side of the rule is that the debate alone has increased awareness and inadvertently provided a solid opportunity for compliant asset managers to use to bring in more business,” said Chris Barnes, senior vice president at Market Strategies. “From an investor perspective, the DOL rule is a no-brainer. Asset managers need to forget about the burden the rule presents and focus on leveraging investor awareness to strengthen existing and attract new business.”

The cost of the rule is not something the industry should take lightly, but with many investors now aware of the difference, the rule will likely become a more central part of the selection process for investors.

“Cogent has found that trust is a consistent and vital part of a healthy business, and fighting the rule may do more harm to an asset manager’s reputation than complying with the DOL fiduciary rule,” said Julia Johnston-Ketterer, senior director at Market Strategies. “This is especially true when it comes to attracting new business, as asset managers and financial advisors can leverage their fiduciary status to differentiate themselves in a crowded market.”

Furthermore, 63% of investors who are aware of the ruling and use advice from a source other than a financial advisor express preference for working with a fiduciary, highlighting the biggest areas of opportunity for new business.

Market Strategies can help firms capitalize on this opportunity by understanding where they stand on trust and how to effectively build a strategy to specifically address their strengths and weaknesses.

About Cogent Beat™ Investor

Cogent Reports conducts a monthly online survey with over 1,000 affluent investors who are recruited from the ResearchNow and SSI online panels. Results cited in this release are from data collected from January to March of 2017. In order to qualify, respondents are required to have at least $100,000 in investable assets and have sole or shared household financial decision-making responsibilities. Due to their opt-in nature, the online panels (like most others) do not yield a random probability sample of the target population. Thus, target quotas and weighting are set around key demographic variables using the most recent data available from the US Census Bureau. As such, it is not possible to compute a margin of error or to statistically quantify the accuracy of projections. Market Strategies will supply the exact wording of any survey question upon request.

For more of our findings related to the DOL fiduciary rule and it's implications, check out our blog.

Read more findings about the impact of the DOL fiduciary rule

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