The regulatory reform advisors are facing is “nothing less than stunning,” Amy Glynn, president of Pension Resource Institute told attendees on Monday at the Center for Due Diligence’s 2011 conference. Broker-dealers have been managing their businesses in a “silo manner,” she said, something that will have to change as rules take effect.
Chad Gutner, business development consultant at Commonwealth Financial Network, agreed. Advisors will begin “taking things into their own hands” if their BDs don’t take charge.
Only Rule 408(b)(2) requires advisors to do anything affirmative, Jason Roberts, founder and CEO of PRI, said. Advisors must disclose the state in which they do business, their indirect and direct compensation, which services they provide that require fiduciary status and their compensation for termination.
Both advisors and registered reps need a “solid suite” of products and services to offer their clients, Glynn continued. In addition to their fiduciary duties, investment education to plan sponsors, committee support to help sponsors perform their duties, assistance with selecting and monitoring service providers and exam readiness support are examples of some of the services advisors can offer to differentiate their business.
For example, 81% of pre-retirees do not have a written retirement plan. Why not be one of the advisors who do offer a written plan “and make that part of your education strategy?” Roberts asked.
It’s important to have solid processes in place to make sure that you don’t drop the ball, Gutner said. Advisors must do a better job of describing and selling their services, he continued.