Even With Trump Memo, Firms Are Fiduciary Focused

Despite uncertainty around the future of the fiduciary rule, firms are clearly still committed to expanding fiduciary support services for their staff and clients—as demonstrated by the continuing stream of product updates and announcements. 

By John Manganaro | January 24, 2017
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The latest confirmation of commitment to expanding fiduciary services for retirement plan staff and clients—come what may concerning the formal Department of Labor (DOL) rulemaking effort—was shared with PLANADVISER by Envestnet.

As the firm observes, the Trump administration has issued a memo to all federal departments and agencies to “freeze indefinitely rulemakings not yet finalized and to delay by 60 days implementation of those rules finalized but not yet implemented.”

James Lumberg, executive vice president of Envestnet, suggests this may very well be taken to include the DOL fiduciary rule, “which raises an important question for advisers: Should they pursue a business model that responds to the digital, demographic and economic pressures reshaping it, or breathe a sigh of relief and return to business as usual?”

Despite the anticipated delay, Lumberg says that financial advisers and enterprises have opportunities to “provide a fiduciary standard of advice that clients are increasingly expecting.” At Envestnet, this includes “remaining committed to technology enhancement and empowering advisers to capitalize on the fiduciary opportunity and to foster more engaged relationships with clients,” he says. 

Lumberg observes that Envestnet is very clearly seeing “massive market and consumer forces” that are reshaping the way advice is being delivered.

“Investors increasingly expect that advisers will act in their best interest,” Lumberg continues. “There is a great deal of momentum behind implementing a broader fiduciary standard [regardless of what happens next with DOL]. Aside from evolving regulatory requirements, other market and consumer pressures such as growing client demands for fee transparency, the rise of digital-advice, goal-based investment planning, and product innovations all contribute to an anticipated shift in how advisers of the future will run their businesses.”

NEXT: Product shelves will shift