Based on 80 industry and client interviews, recent Broadridge research found that 93% of advisors polled had already conducted critical Reg BI meetings with their clients between February and April. The conversations included a review of business practices, fees and other elements featured in Form CRS; and reaffirmed or reset each client’s KYC (Know your Customer) components, financial goals, savings plans, and investment product preferences. Portfolios too were reviewed and rebalanced.
Firms told us the unusual market activity helped them focus on completing Reg BI’s thicket of documentation related to Duty of Care, business processes, policies and procedures.
Evolving a Reg BI Practice
Other findings detailed how advisors are adjusting their business models:
- More than 51% said they took steps to speed up the development of ecosystems that include holistic financial concierge or advisor-as-coach approaches
- In addition to specialties like 529s, goal-based plans, and longevity-health planning, advisors solidified partnerships with banks, HR specialists, accountants, lawyers – as well as a network of insurance, real estate and tax professionals
- Some 80% said they are also looking for more help from asset managers in optimizing their business practices; and improving their knowledge of portfolio construction and risk management
The pace of technology adoption also spiked for both advisors and clients between February and April.
Even communication styles went through a major change as the use of digital tools expanded past Zoom to video chat rooms. Advisors are also including whiteboards and better production values to make meetings-at-a-distance more engaging whether the subject is financial planning or a portfolio review. Digital distribution of content leapt from an e-Delivery goal-setting of 65% to 98%.
For entrepreneurial wealth management firms, Reg BI represents a way to position the new client standard as a benefit, a way to accentuate the client-centric attributes of a firm and its advisors; and turn a compliance requirement into a value proposition.
The implementation of Reg BI represents another step on the road to providing clients with a better, more personalized experience. In a twist of fate, our disruptive moment seems to represent good timing for Reg BI Readiness. New clients too are turning to financial advisors in greater numbers in their search for fiduciary-minded coaches who can guide them through the economic recovery ahead.