Top 3 Ways BDs Can Help FAs With DOL-Related Platform Shifts

Throughout this year, many financial advisors are paying closer attention to the investments they typically recommend to clients and have been forced to reassess which ones best align with the new regulatory environment.

Complicating matters is the Department of Labor’s latest proposal to delay implementation of its fiduciary rule by another 18 months. Advisors, however, should not have to navigate this period of uncertainty alone.

Indeed, broker-dealers have an important role to play in helping them get through this process stronger than ever — both in meeting the demands and needs of their clients, as well as handling their many compliance obligations.

Here are three ways broker-dealers can best help advisors select products and asset managers in a post-DOL era:

1. Provide technology-driven tools that take the guesswork out of product selection.

Given how national news outlets have covered the DOL rule, many investors are now fully aware of what it means to be a fiduciary — and will likely expect that type of relationship with their advisor, regardless of what happens to the rule in the future.

Fortunately, some firms added tech tools to their platforms that not only help advisors better meet these client expectations but prevent the appearance of favoring one product over another.

One such example is a digital questionnaire that accompanies the account opening process that prompts advisors to ask clients a range of questions touching on everything from risk tolerance to financial goals.

A client’s responses generate appropriate product suggestions, including some investment solutions that tend to catch the eye of regulators when offered in a vacuum, like variable annuities, REITs or other alternative vehicles. In a fiduciary era, having access to such tools is rapidly becoming a “must have” not a “nice to have.”

2. Offer a fiduciary-centric process for selecting third-party asset managers.