Stop Worrying about the DOL rule changes

The wealth management industry is in a weird game of “will it or won’t it” right now.

Under the Obama administration, changes to the Department of Labor rule about fiduciary standards passed, requiring more financial professionals to meet the “fiduciary” standard—meaning a decision for a client always has to be in the absolute best interest of the client, even if it won’t make their financial professional as much money.

But now with the incoming Trump admin, there are attempts to delay or flat out kill the upgraded fiduciary rule.

To the general public, this update in the rule makes sense. Why shouldn’t all financial professionals have to make sure they’re putting their client first? It seems pretty basic.

But to those in wealth management, it’s an unwelcome change. More paperwork, more regulation, and having to work more to prove that you’re abiding by the rules will be necessary.

And then for Registered Investment Advisers (who already have to abide by a fiduciary standard), there’s a whole other concern: If everyone has to play the same rules, how will they differentiate themselves from their competitors? The fiduciary standard is a huge tentpole in the average advisor’s marketing and communication plan.

I’ve read a few stories over the last week (like this one) since the delay option came on the table suggesting that RIAs will be the winners if the rule is negated, because it allows them to keep that sacred “fiduciary” label all to themselves.

And to that I say: Stop being lazy, RIA firms.

If you’re relying on the term “fiduciary” to be what sets you apart from brokers and other financial professionals, you just aren’t trying very hard.

Your marketing and communication plan should not center around you being the only fiduciary in town.

Can being a fiduciary be a great advantage? Sure.

But if your marketing plan consists of throwing the terms “fiduciary” and “your best interests” around all the time, you’re not really trying. Maybe you’ve established why you’re different from a broker at your core, but you haven’t done a thing to set yourself apart from the RIA firm across the street, across the state, or across the country.

So here’s my tip: Don’t rely on the fiduciary rule changing—or not—to force you to put together a real marketing plan. There are unique aspects to your firm that are worth exploring and highlighting.

Be better—not because a government regulation asks you to—but because the industry needs you to be better.

Quick thoughts on ways to set your firm apart:

  1. Focus your communication on your client, not yourself. It’s a basic idea, but too many firms still don’t abide by it.
  2. Feature your team members and go beyond the standard corporate speak. Much of the time when an investor chooses an advisor, they’re choosing a person, not a set of portfolios or research documents.
  3. If your investing methodology is unique or heavily influenced by research and education, put it out there. Most firms tend to talk about their strategy in generic terms.
  4. Educate, educate, educate. The more information you give to prospective clients, the more you show them you’re the right choice.
  5. Use technology to your advantage. Within a certain age range of investor, you’re not just competing against the guy across the street; you’re also competing across firms like Betterment, Wealthfront, and even a place like Mint if the person likes investing themselves. Got cool financial planning tools or a mobile app? Those can be a big draw for many potential clients.

Most of all, do not sit back and rest on the idea that simply telling an investor that you promise to put their interests first will be enough to get you new clients.

If you don’t know how to talk about what you do and why you do it, that’s fine. It’s difficult to find perspective when you’re on the inside. Work with a professional to help you put together the right words.

If the DOL rule change does go through? Don’t complain about it leveling the field with the fiduciary standard.

Look honestly at your firm, establish the real marketing points you need to highlight, and then get to work.

Want to get your marketing strategy on point? Get in touch with me here.