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

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 next


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 It'll help us continue to serve you.

Yes, show me how to whitelist

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


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print