Independent financial advisers servicing the retirement planning industry were keeping a close eye on the recent presidential election, especially in light of sweeping industry changes such as the Department of Labor (DOL)’s Conflict of Interest rule.
According to a survey by the Financial Services Institute, 86% of financial-services firms and independent advisers want President-elect Donald Trump to repeal the fiduciary rule.
The survey also found that 71% of respondents said they cast their vote for Trump, while 19% said they voted for Clinton. Under a Trump presidency, 58% of advisers said they expect a strong economy in 2017, and 56% said they expect 2017 to be a strong year for equity performance.
“Main Street financial advisers serving retirement savers have their finger on the pulse of the lives of their hard-working clients and it’s important that we tap into their perspective,” says FSI President and CEO Dale Brown. “Our members have a unique vantage point on these issues, as they work closely with investors of all sizes and means, to help them save for retirement, fund their children’s education and care for aging parents. Our members, who are Main Street not Wall Street, contributed $48 billion to the U.S. GDP in 2015. Their call to repeal the DOL fiduciary rule as soon as possible is driven by their clients’ need to access their help in securing a dignified retirement. Last year, the clients of our members sent over 100,000 letters to the Department of Labor, pleading for relief from the rule. It’s time we allow these professionals to serve their clients in a way that they want and deserve to be served.”
Only 3% believe tax increases should be a part of any tax reform deal next year, the survey found. And more than half of advisers now have a succession plan in place – up 10% from FSI’s last poll two years ago.
The potential and still uncertain impact of the DOL fiduciary rule caused many to speculate whether independent financial advisers would exit the business. However, about two-thirds of advisers said they don’t plan to buy or acquire another practice or book of business within the next one to five years. For those who responded “yes,” the main motivation for that decision was a need for scale to remain profitable (28%). When asked whether they planned to do this within the next five to ten years, 73% of advisers said “No.”
When asked whether they plan to retire or sell practice within the next five to ten years, 74% said “no.” Of the group that said “yes,” retirement was the main reason (67%), followed by opportunity to monetize the practice (9%), compliance burdens (7%), and the DOL Fiduciary rule (6%).
FSI is a trade association for independent financial-services firms and independent financial advisers. The survey polled more than 1,300 professionals in these fields a week after the election.
More information about the results can be found at FinancialServices.org