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Regulation implemented around the globe is driving advisors to act in the best interest of their clients and validate this intent through documentation. This—in and of itself—is not a bad thing, but it does heavily restrict how an advisor is able to monetize on clients with smaller investable assets; ultimately, this leaves that demographic underserved.
There is no singular solution for these client-focused regulations. However, with the correct combination of technology and workflow adjustments, a firm can further ensure that they are acting in the best interest of each client. In order for an advisor or firm to provide this “best-interest advice,” they must develop an understanding of their clients — including their current financial situation, goals, risk tolerance, and individual value.
The anticipation of the Department of Labor fiduciary rule in the U.S. is still top of mind for those in the financial services industry. It is possible that compliance, regulation, and the governing of this industry have actually taken the back seat for years. Now, financial services regulation—specifically regarding how they treat their clients—is in the forefront.
While there are many ramifications for the compliance strategies of financial services firms, this regulation focuses on the consumers and their financial future. Consumers will benefit from organizations that stay the course on this pending regulation and continue to focus on the client’s best interest. “Refining the customer experience will be the main driver for technology that drives core transformation, digitization, and automation. As technology upgrade cycles continue to shorten, banks may finally demonstrate a willingness to retire legacy systems for cloud-based platforms,” according to Deloitte.
In the coming years, it will be interesting to track how the DOL rule affects client experience. Regardless of whether the rule is temporarily delayed or repealed entirely, consumers will begin to demand higher levels of transparency and collaboration to ensure their best interests are upheld. Whether you are an independent advisor or work for a large firm with thousands of advisors, this will affect your client experience.
Imagine a customer speaking with an insurance representative at a bank or reviewing weekly account transactions on a mobile device. These are touchpoints at which firms may consider changing their client experience — the look, the feel, and the way in which it entices clients to act. Specifically, more and more firms across the financial services industry will have to raise their standards and adopt new technology to keep up with the competition.
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