Advisers plan to spend more for compliance and tech in 2017

Many adviser marketing budgets also set to increase, with social media the focus

Nov 29, 2016 @ 1:10 pm

By Liz Skinner

+ Zoom

Many financial advisory firms are set to spend more on compliance, technology and marketing next year.

Financial advice firms are planning to increase spending next year on compliance and technology, with about 53% of advisers indicating that each area will be a priority for them in the coming year. At the same time, 46% will devote more resources to marketing, according to preliminary results of an InvestmentNews adviser survey of about 200 advisers.

The April 2017 start-date of the DOL retirement rule has some advisory firms cutting back on some items to prepare for even more compliance costs next year.

“We have made some reductions with anticipation of lots of expenses,” said Joshua Mellberg, president and founder of J.D. Mellberg Financial.

His firm cut research and development expenses and put a freeze on hiring “to make sure we're prepared to go through the DOL rule,” he said.

The Labor Department rule requires all advisers act in the best interests of clients when providing retirement advice. The rule is particularly significant for advisers who currently accept commissions, though even fee-based advisers are going to need to make changes to their processes and possibly the products they offer clients.

(More: Kansas judge denies effort to block DOL fiduciary rule)

Mr. Mellberg said he believes the rule could boost pressure on the firm's fee-based advisers to lower what they charge and could impede revenue to its advisers who take commissions if new retirement products aimed at meeting the rule requirements aren't as attractive to consumers.

Robert Henderson, president of Lansdowne Wealth Management, said his firm will spend more money on technology and marketing in 2017.

Part of the increase for technology will cover the cost of maintaining his data systems, which he just recently moved to the cloud, and some will fund a move to new technology providers to increase how well his systems integrate with each other.

He'll also update the firm's website.

(More: 7 essential elements of top adviser websites)

“I need to improve the website and make it all flow better online and look better on mobile devices,” Mr. Henderson said.

Douglas Boneparth, a partner at Longwave Financial, said he'll also be spending more on marketing and technology in 2017 as he focuses on working with millennials and young professionals.

“I expect to increase internet and social media marketing expenses, as well as developing excellent content for my audience,” he said.

Other independent advisers also seem ready to spend more on social media as increasingly advisers are having more luck with online marketing efforts.

Jon L. Ten Haagen, founder and principal of Ten Haagen Financial Group, said his firm is trimming its direct advertising budget to spend more with the social media company it's hired, Infinity Relations Inc.

“I feel they will get our name and expertise out there and recognized better than throwing more money against a wall,” he said.

The firm's already seen better results with social than they had been with traditional advertising, he said.

“And they also give us guidance on how we should address the public about us,” he said.


What do you think?

View comments

Recommended for you

Featured video


Wirehouse training programs are in vogue

At one time, major brokerage houses ran large, expensive training programs for thousands of young brokers, and now it looks as if they are about to return to that model.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

Labor's Alexander Acosta and SEC's Jay Clayton tell lawmakers they will work together on fiduciary rule

In separate appearances before Senate panels, the regulators stressed the cooperation that Republican legislators and opponents of the DOL fiduciary rule are demanding.

Brian Block denies cooking the books at Schorsch REIT

Former CFO claims everything he did was 'appropriate' and 'correct.'

Interns will take on several roles at advisory firms this summer

College students are helping with client prep, firm visioning and long-term projects, among other duties.

10 funds with largest 3-year outflows

Even well-managed funds that have beaten the S&P 500’s 10.1% average annual gain have watched investors flee.

Wirehouse training programs are back

At one time, major brokerage houses ran large, expensive training programs for thousands of young brokers, and now it looks as if they are about to return to that model.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print