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March 18, 2016 at 03:03 PM
How does a national fiduciary firm view the impending Department of Labor fiduciary rule?
Our sister site, ThinkAdvisor, talked with Billy Lanter, a fiduciary investment advisor at Unified Trust Co., to find out what being a fiduciary means and how he sees the DOL rule impacting the industry.
Unified Trust, a Lexington, Kentucky-based company with $4 billion in assets under management, has been a national fiduciary since it was founded in 1985. Lanter has worked at the company for more than eight years.
In late January, the DOL’s fiduciary rule was sent to the Office of Management and Budget for its mandatory review, and could be released before April.
While not all the details of the rule are public, Lanter, speaking broadly, said “we’re in favor of a fiduciary, higher standard of care.”
“What we’re leery of a little bit – we just have to wait and see when the [regulations] come out – we don’t want a watered-down standard where you end up trying to delineate between what degree are you a fiduciary,” Lanter added. “A fiduciary should be a fiduciary, and that should mean certain things.”
Lanter explained what being a fiduciary should mean.
“What’s the number one reason someone hires a financial advisor? It’s not performance, it’s not fees,” Lanter said during a visit to ThinkAdvisor’s New York office. “Year after year, study after study shows there’s one dominant factor in choosing an advisor: Trust. If you remove barriers to trust – by being a fiduciary, offering full fee transparency, no proprietary products and those types of things – you remove barriers so now [the client can say] ‘I know what’s going on. The relationship we’re going to have, it’s going to be one that I can trust.’”
Lanter also commented on what he sees as the potential impact the fiduciary rule could have on the industry.
It’s a hard question to answer without knowing what the final regulations are.
“I think you’re going to have a couple camps: You’ll have those that are already operating under a standard that value what they’re doing,” he said. “They’re going to be very well-positioned … to take advantage of the regulations that are coming.”
