DOL Rule Forces Independent Advisors To Differentiate, Adapt, Schwab Says

Pressured by lowering fees, increasing competition and regulations, advisors are nonetheless optimistic, according to San Francisco-based Schwab Advisor Services.

In the 21st Schwab Independent Advisor Outlook Study, advisors are feeling pressured to differentiate themselves as other channels of the industry adopt policies and practices to look and act in similar manners, said Bernie Clark, executive vice president and head of Schwab Advisor Services.

“Advisors have remained optimistic, even in the darkest periods of time, but they’ve often had to change their tactics,” Clark said on a Tuesday morning conference call.

As the Department of Labor’s fiduciary rule becomes applicable, independent advisors will have to consider ways to differentiate themselves, said. Most, 76 percent, believe that they will be able to use technology to stay ahead of their competition.

Two-fifths of the survey’s respondents say the independent model will be able to differentiate itself from other channels by offering its clients a broader range of services, like tax planning, philanthropic planning and healthcare planning.

“We think independent advisors have an advantage, those who can be more creative in delving into the personal side of client relationships and help people through life coaching and areas like that are going to be greately rewarded by clients,” said Clark.

Faced with competition and fee pressure, advisors say that they’re doing more for less.

According to the study, 44 percent of advisors have already begun providing more services to their clients without charging for them, and 40 percent of advisors have started spending more time on each client without increasing fees.

“Advisors are going to do more, or serve more assets, with similar numbers of resources,” said Clark.

from FA News–optimistic-independent-channel-challenged-to-differentiate–adapt-and-grow-33232.html


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