The future may be full of twists and turns, but it will most certainly bring increased regulation. <p>Image: <a href="http://www.freedigitalphotos.net" target="_blank">FreeDigitalPhotos.net</a></p>

We are seeing many regulatory changes in the financial industry. From 151A to the discussion of SROs for RIA firms to all of the ramifications of Dodd-Frank, the industry is sure to see more controlled regulation come to pass over the coming years.

See also: Regulatory Certainty. Really?

As financial advisors we must stay on the cutting edge of regulation reform. One of the ongoing debates is whether or not to require more financial professionals to adhere to the fiduciary standard. As the discussion moves through the broker-dealer industry, I think even insurance agents should be aware of the potential impact on business if it moves into the realm of insurance agents.

My practice is an SEC registered RIA, so I am already subject to the fiduciary standard, which is a more stringent requirement than that of stockbrokers and insurance agents who are only subject to the suitability standard. Consequently, I don’t have any choice in the matter. However, I firmly believe that acting as a fiduciary is the absolute best scenario for the client. I have to always act solely in their best interests, and I am required to provide full disclosure in everything that I do.

The only way to do business

In my view, this is the only way to do business in this great industry. Please don’t misunderstand me; I am not saying that all financial professionals must get licenses that will require them to act as a fiduciary. What I am saying is simply this: Regardless of how you are licensed, you should conduct business as if you are indeed held to the fiduciary responsibility.

What could be more impactful than applying this standard in your business? It means you make recommendations that focus entirely on the client’s well-being and your ability to serve their needs. You are always looking out for their best interests. You fully disclose any and all potential conflicts.

It also means that the products we recommend to clients should be in their best interests, and not ours. That means that if a client is better served with products that have shorter terms and lower commissions, we must act solely in the best interests of the client. The end result is that the client is better served, and this ultimately leads to long-lasting, trusting relationships with our clients.

This is exactly how trusted advisors work. We educate clients of all the pros and cons of their potential decisions, and we help guide them toward meeting their goals. We’re not here to sell products. We’re here to help our clients use their money to achieve their life goals in retirement and beyond. We therefore focus on the process, not the products.

True transparency can transcend the nature of your practice. While it may be a little bit intimidating to implement, I am confident you will find it can radically transform your business, turning your clients into raving fans.

For more from Jim Brogan, see:

Put the Client First

Targeting Younger Baby Boomers: The Future of Retirement Planning

Cultivate High Profit Partnerships with CPAs