Presidential election is a warning shot to financial services industry

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.
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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.
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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.