Brian is responsible for platform technology solutions and strategic integration partnerships at Advicent. For 15 years, Brian has worked in FinTech product development, successfully aligning technology and architecture to meet the business objectives of financial organizations.
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The 2017 TD LINC conference was eventful to say the least. Things kicked off with the much anticipated unveiling of TD’s VEO One®, a slick new advisor dashboard that centralizes all the information that a registered investment advisor (RIA) needs to run his or her business. While still in the early stages of integrating all the key vendor solutions, their concept is sound and will no doubt be a successful tool for RIAs to more effectively operate their businesses.
DOL fiduciary rule announcements from the Trump administration
The technology rollout was exciting, but what struck me as even more interesting was the level of uncertainty and concern regarding upcoming implementation of the Department of Labor’s fiduciary rule. The RIA community is well-suited to benefit from the rule, should it indeed be implemented. Their business model largely positions them as fiduciaries, and thus they are already acting in the best interest of their clients. In a break out session at TD LINC dedicated to reviewing the rule, however, more than 200 advisors packed in to conference hall to pepper the presenter with all manner of questions.
It quickly became clear to me that the group was perhaps not as prepared as I originally thought. It was also apparent that most of them had not bought in to the widely-held belief that the rule was about to be rescinded by the Trump administration. There was genuine and palpable concern about how to move forward. As we now know, the reports of the rule’s death were greatly exaggerated.
Then came Friday’s announcements from the Trump administration regarding Dodd-Frank and the DOL fiduciary rule. The early reporting from major news sources led the majority of advisors to believe that Friday, February 3, was to mark the death of the DOL fiduciary rule. This seemed to clarify things a bit, only to further cloud things in the end, as the final executive memorandum from President Trump merely asked the Department of Labor to study the rule and recommend how to proceed.
Seeking clarity in the midst of changing regulation
For a time, at least, there was a collective sigh of relief from the RIAs in attendance at the conference. After the fist-pumps, celebratory high-fives, and clicking of heels subsided, it occurred to me that the real story might be getting lost. While the DOL fiduciary rule predictably garnered most of the attention of the advisors in attendance, a repeal of the Dodd-Frank legislation may ultimately have more impact on planning than a DOL fiduciary rule delay. The fact is, the expectation of fiduciary advice is already concretely set in the minds of many consumers of financial advice. So regardless of whether or not the rule is fully implemented, the industry has already fundamentally changed in a permanent way.
Dodd-Frank, on the other hand, is a very different and complex law. One aspect of the law that I believe may impact advisors is regarding financial data sharing. Without getting in to the legal weeds, the crux of the issue is that financial institutions have a lot of financial data, and when that data is made accessible electronically, FinTech companies can build innovative solutions that add real value for consumers.
Budgeting tools, personal financial management software, account aggregation software, and advanced analytics solutions are all enabled by having access to this kind of information. Some banks, however, have historically not wanted to open up their architecture for a number of reasons. Without rules around how that information is stored and shared—and a governing body to provide oversight—innovation in the FinTech space could be significantly slowed.
In the end, uncertainty is the enemy of progress in financial markets and technology. Regulations are generally looked upon by the industry with disdain, but it would seem that what the industry practitioners are desperately seeking now is clarity, and I think we will continue to see lots of questions and concerns from advisors on what the future may hold until we receive it.
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