It isn't an overstatement to say that the future of the advice business hangs in the balance as federal agencies conduct scores of studies and write hundreds of regulations designed to carry out the sweeping mandates of the Dodd-Frank financial-reform law.
Since no one knows the ultimate shape of these regulations, nor the effects that they may have on the various sectors of the financial services industry, financial advisers wait with trepidation.
But they can't allow the uncertainties to distract them from giving their clients the best possible guidance. That may demand more focus and longer hours than ever before, at least until the effects of the new regulations become clear.
For proof that many advisers are finding it difficult to live with the uncertainty, look no further than the results of
InvestmentNews' 2010 Industry Attitudes survey.
Thirty-nine percent of respondents ranked “regulatory overload” as the biggest issue facing the industry, right after “economic problems” (44.4%). The survey also found that advisers are wary of the Dodd-Frank reforms, with 67.9% indicating that the measure is either “a disaster” or “not a good law.”
Advisers' fears, it seems, are justified.
As Skip Schweiss, president of TD Ameritrade Trust Co., said in a story that appeared in this publication last week: “We have always had an evolution of regulation, but right now, we have an avalanche of it — and it's going to disrupt a lot of business models and cause tremendous work and expense.”
But advisers are hardly alone in their uncertainty.
Sitting across from them each day is someone who is even more uncertain about the future: a client.
Rarely have clients been confronted with so much uncertainty.
For the first time in their lives, many are worried about their abilities to avoid foreclosure or keep a job. Those who are free of such concerns still face overwhelming uncertainty about the U.S. economic recovery, health care reform and the long-term effects of federal, state and local government deficits.
And as we have noted in recent editorials, there is the uncertainty about where to invest, and what investment returns can be expected, given the changing state of the U.S. and global economies.
For the sake of their clients, advisers must push past their own fears and apprehension. They must vanquish the uncertainty of their clients with the certainty of their own convictions — convictions steeped in integrity, based on their training and analytical thinking, and on a strong desire to help clients achieve a state of financial well-being.
Fear and uncertainty over coming financial regulation can't come between advisers and their clients.
Just ask RBC Wealth Management adviser Mark Donohue, a 27-year veteran of the advice business.
Even though it has been more than two years since the financial markets went into a tailspin, he still finds himself working six days a week to make sure that clients know that he is taking care of them.
“I've worked six days a week for well over a year, just to make sure people know I am there working and that clients feel prioritized,” Mr. Donohue said in an
InvestmentNews story last week. “That's the minimum we should deliver to people who
trust us with their money.”
