The DOL Had Their Say. What next for Advisors?

The release of the U.S. Department of Labor’s (DOL) much-anticipated new “fiduciary” rule recently stole many headlines – most of which focused on the resulting challenges facing much of the advisory industry.

While we agree that the rule has the potential to affect all aspects of advisors’ business operations, we actually see the rule as an opportunity for advisors to embrace many advisory best practices and ultimately, build sustainable advisory businesses.

Over the past year, we have reported on what we consider are some important steps advisors can take in light of not only the DOL rule, but also some of the other major forces influencing the advisory landscape these days – such as aging clients, the rise of millennials and technology shifts.

Specifically, we believe that advisors who focus on the following four pillars have the potential to successfully navigate the changing advisory landscape.

Four pillars of a sustainable advisory business

  1. Manageable number of client households
  2. Product inventory control
  3. Documentation and implementation of key processes
  4. Optimized client experiences, including client portfolios

In the following weeks, we will address each of these four pillars in turn on the Helping Advisors Blog, offering ideas for how to strengthen them in your own business.

The bottom line

There’s no doubt that advisors are facing a number of competitive pressures. Retiring boomers, millennials coming into their own, technological innovations and now the new DOL rule are all changing the landscape for advisors.

But we believe that those advisors who are willing to rethink how to remain competitive and relevant and manage the four pillars of a sustainable advisory business within their own practice have the potential to benefit from the shifts.

Disclosures

Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type.

Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.

The general information contained in this publication should not be acted upon without obtaining specific legal, tax and investment advice from a licensed professional. The information, analysis and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual entity.

Russell Investments is the owner of the trademarks, service marks and copyrights related to its indexes.

Russell Investments is a trade name and registered trademark of Frank Russell Company, a Washington USA corporation, which operates through subsidiaries worldwide and is a subsidiary of London Stock Exchange Group.

Copyright © Russell Investments 2016. All rights reserved.

This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments. It is delivered on an “as is” basis without warranty.

UNI – 10803