Fi360 executive chairman Blaine Aikin kicked off the firm’s annual conference Wednesday afternoon in San Diego with a regulatory recap of both the Department of Labor’s Conflict of Interest Rule and the SEC’s version recently proposed.
“The DOL fiduciary rule is on life support, but it will leave a lasting legacy on the industry and consumers,” Aikin said by way of introduction.
As for the SEC proposal, “it’s a little bit of back to the future,” he added before flashing a slide with Fi360’s interpretation of what it contains.
“If someone is to call themselves an adviser or advisor, they must be registered as such,” Aikin explained. “It would go a long way towards clearing up confusion” about titles.
As a result, more brokers will register for compliance and competitive reasons, and simplified disclosure would be an important complement to the registration.
Throwing a bit of cold water on hopes of an SEC version, Aikin argued such a rule wouldn’t be fully realized until 2020 “at the earliest, but we believe there is a good possibility, due to significant pushback, that it might not ever fully come to pass.”
It’s therefore “more incumbent than ever to establish ourselves as fiduciaries and foster trust, something that transcends compliance.”
He closed with suggested action steps in the current environment, which included:
- Recognize that regulations set a low bar or minimum standard and that they’re uncertain, so aim higher.
- Concentrate on what you can control, which are the factors in the “trust equation.” Trust = (Credibility + Reliability + Intimacy)/Self-orientation.
- Actively advocate for high professional standards; the low reputation of “financial services” generally is not only bad for investors, it is bad for your business.
- In the competitive marketplace, the one closest to the client always wins. Fi360 is working to help make sure that’s you, and you can’t be that unless you’re a fiduciary.