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DOL Fiduciary Means Higher Costs, Robo Exploration: Raymond James Exec

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The new Department of Labor fiduciary standard represents “the most dramatic regulatory change in a number of decades, suffice to say,” explained Scott Curtis, head of Raymond James’ independent advisor channel, in an interview on Tuesday.

Speaking after his speech before some 1,700 advisors and 1,400 other guests at the firm’s yearly conference in Nashville, Curtis underlined comments made recently by CEO Paul Reilly.

“We know there will be increased costs of doing business, but we do not know [yet] what they will be and how they will be allocated,” Curtis explained.  

“We tell [our advisors] today that we will not change anything until we [first] give them some level of guidance about what we will change,” he stated. “Give us time and stay engaged in the dialog. We will keep you up to date.”

As part of complying with the rule before April 2017, the firm may consider a robo option, the executive says. (Rival independent broker-dealer LPL Financial announced its robo-partnership with BlackRock’s FutureAdvisor two weeks ago.)

“We do not have a robo plan today,” Curtis said. But the firm is looking at any and all options when it comes to complying with DOL. Thus, it is “something we have talked about and certainly would explore,” if a robo plan would support compliance with the new rule.

“Advisors and affiliated financial institutions ask us about it,” he explained. “It’s something we can explore, but we are not going to disintermediate the advisor – [not] go around and separate the advisor from the client. That is something we would not do.”

In a video presentation before Curtis spoke to the crowd in Nashville (aka Music City), several advisors addressed the importance of real client contact — and made an analogy between the music business and the field of financial advice.

“You cannot create trust on a machine,” said Mark Deering, executive vice president of the Southwestern Investment Group. With music and financial advice, the technology “is just there so that you can have a face-to-face experience,” he explained.

Curtis reinforced the analogy, adding that the Raymond James platform “has got to do what [best] supports the advisors and helps them better manage the business and client relations.”

This doesn’t mean the firm will not do a robo offering or platform, he says. However, “Whatever we do is going to be in partnership with the advisors, not direct to consumer. That is not our model.”

— Check out Gauging the Impact of Robo-Advisors on ThinkAdvisor.


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