Joe Duran

Duran Duranblog

Joe Duran

Presidential election is a warning shot to financial services industry

Clients want their priorities taken care of in a non-conflicted way and want to be empowered to make better financial choices

Nov 23, 2016 @ 10:00 am

By Joe Duran

The U.S. Presidential election turned a lot of heads worldwide. For the first time in modern history, the U.S. elected a commander in chief with no political experience, little of the support traditionally given to the candidate of a major party and none of the big money from business interests. This happening in the same year that British voters surprised everyone by electing to leave the European Union suggests some bigger movement is afoot. Talk about a revolutionary time.

These changes were messages from the people about their level of dissatisfaction with the status quo. We are empowered and informed now more than ever. We want honesty and authenticity. Voters have taken it upon themselves to protest a broken system and want a voice in fixing it. That's true in every facet of their lives and now it's evident in politics, too. But it's also a warning shot to our industry.

(More: Leadership insights from former President George W. Bush)

These twin pillar “we've had enough” upheavals highlight three very distinct concerns the electorate and many investors share in common. These are their voices:

1. “We are tired of the status quo.” People feel the system is broken. The electorate is tired of the empty promises, the uncontrolled wastage, the special interests and the bills that give career politicians a different set of rules than the rest of America. Many investors feel the same way about our industry and its tone deaf approach. They have lost pensions and watched health care and education costs explode, and the markets have provided precious little relief over the past 16 years.

2. “We want more personal power.” We have seen unprecedented expansion in our country's debt levels. In the meantime, increased regulations and taxation over the past few years have continued unabated. Health care is mandated and forced on every citizen. Most voters want to be empowered, not pandered to. The financial services industry is often perceived as guilty of over complicating, pandering and keeping consumers powerless and dependent on us. Many feel taken advantage of — the big institutions simply don't care about them or really help them navigate a more complex financial life.

3. “We want a new way.” American voters have said it's time their interests come first, and have decided the risk of the unknown is better than staying with a system they perceive has failed them. Much of the Department of Labor's application of the fiduciary standard is to ensure that firms helping retirees place their clients' interests first. If all we do is argue about minimum standards, rather than creating a more empowering, connected and relevant way to help clients with their entire financial lives, we are missing the point. They want real change. And if they don't get it, they will vote with their wallets.

If there is a lesson for our industry to heed, it's that people are more empowered than ever. I suspect with the passage of time this election will be looked back on as the ultimate outcome of the populist (consumer) revolution that has been sweeping every industry. It's now come to government.

(More: The DOL rule kicks in. Will independent broker-dealers survive?)

In our industry, we all had better adapt to the new world order. Consider this: Congress has a current approval rating of 20%, but fewer than 10% of Americans trust our industry. The old ways of working will not stand, even if the Department of Labor ruling is somehow slowed down as a consequence of the election. In other words, just like the electorate, clients do not like the status quo. They want to have their priorities taken care of in a non-conflicted way, and they want to be empowered to make better financial choices. If we don't listen, shame on us.

The U.S. has one advantage few other countries possess: We accept change, adapt and become better as a consequence. It's our secret sauce, and is what makes America great — yesterday, today and tomorrow. Change is here in government, and we all need to move forward. Let's tune in to the messages the people are sending our own industry, and get on with making it great again.

Joe Duran is chief executive of United Capital. Follow him @DuranMoney.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

May 02

Conference

Women Adviser Summit

The InvestmentNews Women Adviser Summit, a one-day workshop now held in four cities due to popular demand, is uniquely designed for the sophisticated female adviser who wants to take her personal and professional self to the next level.... Learn more

Featured video

INTV

On the red carpet with Tom James and others at Icons & Innovators

Reflections from Jeffrey Gundlach, Edmund Walters and more at the New York City event

Latest news & opinion

Top 10 IBDs ranked by revenue

These independent broker dealers generated the most revenues in 2017.

8 podcasts advisers listen to when they aren't working

Listening to podcasts for the fun of it.

UBS continues to cut loans to recruits, while increasing compensation to brokers

The wirehouse reduced recruitment loans 20% and increased bonus loans 68% in the first quarter.

Things are looking up: IBDs soared in 2017

With revenue up, interest rates rising and regulation easing, IBDs are soaring.

SEC advice rule may give RIAs leg up over broker-dealers

Experts say advisers will be able to point to their role as fiduciaries as a differentiator in the advice market.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print