5 Tips for Advisors to Give Their Clients a “White Glove” DOL Experience

By now, all advisors know about the DOL fiduciary rule, which takes effect April of 2017.  If you are like most advisors, the details are still a little murky and you’re unsure how your Broker Dealer is going to specifically handle things.

Given this dilemma, an advisor should fall back on the classic idea “treat others as you want to be treated.” Below are five ideas you can use in your practice to give your clients a five-star client experience without knowing every detail of being a fiduciary.

  1. Act Like a Fiduciary: Complying with DOL will require investment advisors to dramatically change how they’re used to working with clients. Before, client/advisor relationships may have been more transactional; now, that can’t be the case. Advisors will have to embody a more holistic point of view of their clients and operate with their best interests in mind, first and foremost. Of course, we’d like to think this was always the case, but the consequences of not doing so now come with severe consequences.
  2. Know the Rule: Some advisors don’t actually understand the rule – and that’s not all their fault. Some firms may not be keeping their advisors up-to-date and ensuring they’re well informed. Regardless, it’s imperative that advisors are educated on the rule, and understand the ins and outs. If they need to take matters into their own hands, there are multiple avenues advisors can pursue to learn more. They can attend a webinar, read online summaries from experts, review the FAQ on the DOL website, talk to their peers, participate in online discussion groups, or attend industry events where DOL is discussed. You can’t underestimate the critical importance of advisors knowing and understanding the rule!
  3. Communicate, Communicate, Communicate: In an environment where regulations are changing, it can be common for advisors to shy away from proactively reaching out to their clients; they may be uncomfortable opening that door, especially if clients ask them questions they may not have the answers to (e.g. when will the firm’s standards change). However, advisors have to communicate, if not over-communicate, with clients during times of change. It’s OK to tell your client you don’t have all of the answers, so long as you tell them you’ll get them and share them as soon as you can (and actually do it). Those being proactive and communicating with clients about DOL will be the ones who retain their clientele and even recruit new business. Those who act like a turtle hiding in their shell risk losing clients to competitors, or risk losing their client’s trust and confidence.
  4. Lay Out Your Value Proposition: Under DOL, advisors have to be transparent, and explain what they are paid, what the conflicts of interest are, and whether the fees/products are reasonable. Given this, it’s more important than ever for advisors to showcase their value to clients. Going back an earlier point, this is why a more holistic point of view for advisors is key. Prior to DOL, advisors may not have facilitated quarterly meetings with “B” and “C” clients, or given them as much attention as they did their “A” clients – that ends now. Moving forward, advisors should be giving all clients their best level of service, and part of that, is sharing what they’re going to do for their client, and actually living up to it. Advisors may want to think about implementing a scorecard (if they don’t already) to help them ensure they are delivering the best service possible.
  5. Share Your Timeline of What They Can Expect: From a regulatory perspective, there are two key dates for the rule: April 10, 2017 (when the DOL begins enforcing the Fiduciary Standard as outlined in the Ruling) and January 1, 2018 (when BICE mechanics go into effect). In addition to these dates, firms and advisors are working against their own timelines of when they’ll be changing their processes and procedures to comply. With all of these moving pieces, it’s important for your clients to be up to speed on the dates that will impact their service. Advisors should take extra care in communicating timelines to their clients so they not only know what to expect, but also when to expect it.

With so much uncertainty and a tough period ahead, advisors can use these tips to build, and maintain the critical relationship with clients. No matter what the rule change may be, the best thing an advisor can do is build long term trust.

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