When your best clients drive your practice,
attracting more of them is easy
Learn to get referrals the natural way
and revolutionize your business
Most of what you have heard about getting referrals
is incomplete, outdated, or wrong
Advisors don’t get referrals because they
have no formal plan to attract them
Steve Wershing is the best marketing mind in
financial planning. - Bob Veres (Publisher, Inside Information)
Introductions following our last client advisory board meeting represent almost $30 million in new assets.

Create a free account to be able to access the resources mentioned in my book and a variety of helpful tools, presentation keynotes, additional material and more!

Contact information

10 Office Parkway

Suite 300

Pittsford, NY  14534




Connect with Steve

join our mailing list
* indicates required

Get posts in your reader

Looking for the resources mentioned in the book?

Click "Register" to join, and Login get free tools!

« New podcast and other developments | Main | Your Niche Needs To Be More Than "I Work With..." »

Discussing the DOL fiduciary rule with your client advisory board


Now that the DOL fiduciary role (the first FAQ about it) have been published, and with initial implementation only a few months away, we have started to see the topic come up on client advisory board meeting agendas. These early discussions, and the clients responses, has been very interesting. If you are affected by the role, this is an important topic to bring to your advisory board. Whatever your strategy for complying with the new regulation, it will have an effect on your client experience and, therefore, on your relationships. So hearing their perspective and getting their feedback will be critical if you want the changes to go smoothly.

Why bring it up?

The first and most obvious question in regard to addressing the DOL fiduciary rule with your client advisory board is why bring it up at all? Your first got response to bringing up any uncomfortable topic may be to simply avoid it. The way one advisor said it to me was “that sounds like it would just stir up a hornets nest.” But your clients are going to hear about it and will likely be affected by it and talking through this, like all sensitive issues, with a small group of select clients will give you the insights you need to understand how best to address it with all the rest of your clients.

Clients have already started hearing about it – articles have begun appearing in Investopedia and Forbes and, as the spring implementation date approaches, more consumer publications will likely be running stories. Unless you are fee-only, some of those articles may be saying unkind things about financial advisors who get paid like you do. Ideally, you would be talking about those issues with clients before they feel like they need to ask you. And even if they ask you first, you are better off having vetted some of your responses with clients in advance.

You may decide to move clients to different accounts – most of the advisors I know who have any significant assets and commission-based accounts will be moving them to fee managed accounts. The ultimate irony that everyone could see coming is that, for many of these clients, the outcome of regulation intended to protect them will actually increase their costs. One advisor I work with has the vast majority of his clients retirement accounts invested in American funds a shares. When he moves them to a fiduciary fee managed platform, those clients will be paying fund expenses similar to or higher than what they pay now, a platform fee, and a manager fee in addition to the small percentage that compensates the advisor.

In one client advisory board meeting I recently facilitated, the advisor explained exactly this kind of conversion and was forthcoming in letting them know that their expenses would increase. The clients were not happy about it but understood the necessity of complying with the regulatory change. That advisor got a lot of insight in what to communicate to clients as those account conversions get underway.

If you leave clients and commission accounts, you will need to explain the exemption – one reasonable way of complying with the rule change is simply to execute a best interest contract exemption (BICE). Very few broker-dealers I have seen have actually published the agreements they will ask clients to sign but rest assured it will not be filled with language that is comforting to the client. In the meantime, there will be people quoted in the popular press with unkind things to say about these kinds of agreements and the advisors who use them. It will be a tricky balance to explain the implications of these agreements to clients without getting too technical. Having the opportunity to present your explanation to a small group of clients and get feedback on how well they understand it is valuable.

If you don’t believe your firm will be prepared you might be considering changing firms – even managed well, changing broker-dealers is traumatic to advisor and client both. Getting the client’s perspective on a potential move can be enormously helpful. The challenge, of course, is that you cannot discuss a firm you are considering (or possibly even that you are thinking of moving at all) in advance of the move itself. There are ways, however, of imposing hypothetical questions and asking clients what their concerns would be and what kinds of things they would like to know about in the event that a change like that might come to pass.

Here are a few ideas on how to engage your client advisory board and helping you through the changes you will need to implement to comply with the DOL rule:

determine how you will comply. What kind of accounts will you need to move to a different platform? Where will you move them to? What kind of paperwork will will be involved?


Outline your proposed changes in the process you will use to implement them.

Send an explanation of the rule and a description of the changes and your process to your board in advance of a meeting. This is a great example of how preparatory materials can make an advisory board discussion as productive as possible.

Present your proposed changes to the board. Find out what questions they have about your post implementation solutions. See how well they understand your explanation of the new rule, the justification behind it, and the rationale for your changes. Discover what questions or concerns they have that you did not address in your materials or your presentation.

Update your strategy and refine your communications. You might find that the platform you want to move clients to is not attractive to those investors. Some additional due diligence may be in order. Your explanations or illustrations might be confusing. A group  events about the changes may be more effective than handling everything in individual meetings. Whatever you learn from your client advisory board, refine your plan based on the feedback.

The new DOL rule may be a game changer in the financial services business. No strategy to tackle an issue as big as this is complete without considering the clients perspective. And your client advisory board is the most effective way to include them.

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>

Subscribe for FREE to The Client Driven Practice Referral Marketing Tips!

10 Office Parkway Suite 300.
Pittsford, NY 14534 | 585-381-2662

© 2013-forever, Stephen Wershing.
All rights reserved.

Home | Contact Us | Login

site by: CR

10 Office Parkway Suite 300. Pittsford, NY 14534 | 585-381-2662

Home | Contact Us | Login | © 2013-forever, Stephen Wershing. All rights reserved.