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Cogent Reports: DOL Ruling Puts Advisors Under MicroscopeThe Department of Labor's (DOL) fiduciary ruling is quite possibly the most significant regulatory action that financial advisors have faced in more than a decade. Many asset managers and distributors are spending millions of dollars in anticipation of the types of support advisors will need to adapt. But what are advisors saying? While they agree with the overall spirit of the ruling, the vast majority of advisors are worried that the ruling could cause more harm than good. These and other findings are included in The Advisor of Tomorrow™, a Cogent Reports™ study by Market Strategies International. Advisors lament that the DOL fiduciary ruling is casting an overall negative industry gloom and fueling investors' focus on fees. Moreover, advisors believe that the DOL action is forcing them toward a fee-based compensation structure and limiting their product selection. Fee-based advisors see the DOL action as formalizing an inevitable market shift, while commission-based advisors fear that commoditizing their service puts them at greater risk of being undercut by cheaper automated advice services. "The advisory role is becoming ever more precarious in the wake of increased volume and scope of internal and external regulations. Advisors report feeling increasingly monitored rather than supported by their firms," said Sonia Sharigian, senior product manager and report coauthor at Market Strategies. "Couple that with an aging advisor population and fewer advisors entering the profession, and it's clear the industry is at a pivotal juncture. Providers must be sensitive to all th different forces at play." The study further identifies opportunities for product providers to better partner with advisors and meet advisors' evolving needs. "In the context of all of these challenges, it's important for providers to keep in mind that advisors are actively seeking business-building ideas and committed to working strategically to future-proof the industry. Newer technologies that can alleviate administrative tasks and enable advisors to focus on more customized service are great examples," said Meredith Lloyd Rice, vice president at Market Strategies. "In addition, there is ample opportunity for advisor advocacy and creating transparent messaging for clients." About The Advisor of Tomorrow Market Strategies conducted 12 focus groups comprising a representative mix of 60 advisors and 60 affluent investors in Philadelphia, Chicago and San Francisco from June 13 to June 21, 2016. The groups included a representative mix of advisors by channel (RIAs, Regional & Independent, and Wirehouse), age, industry experience and AUM; and of investors by net worth and investable assets ($100K minimum), age and advisor/advice model usage. Due to its opt-in nature, these focus groups (like most others) do not yield random probability samples of the target population. As such, it is impossible to compute a margin of error or to statistically quantify the accuracy of projections. Market Strategies will supply the exact wording of focus group questions upon request. About Market Strategies International Market Strategies International is a market research consultancy with deep expertise in financial services with practice areas serving wealth, banking, payments and insurance. We blend primary research with data from our syndicated, benchmarking and self-funded studies as well as Big Data to help our clients grow their businesses and brands. Market Strategies' research specialties include brand, communications, CX, product development and segmentation. Our syndicated products, known as Cogent Reports, are the wealth sector's leading source for insight on the attitudes, opinions and behaviors of key investor populations, including advisors, plan sponsors and affluent and institutional investors. Founded in 1989, Market Strategies is one of the largest market research firms in the world, with offices in the US, Canada and China and additional industry expertise in consumer & retail, energy, healthcare, technology and telecommunications. Read Market Strategies' blog at FreshMR, and follow us on Facebook, Twitter and LinkedIn. View source version on businesswire.com: http://www.businesswire.com/news/home/20160824005172/en/ |
