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Meeting Sponsor Expectations in the Post-DOL-Rule World

Tuesday, July 25, 2017

According to a recent study released by Wells Fargo Asset Management, financial advisors working with defined contribution plans may not be delivering the services that their clients value most.
When asked which services differentiate elite advisers, Sponsors of defined contribution plans ranked “stay[ing] engaged with the Plan,” “manag[ing] regulatory issues” and “offer[ing] simple explanations” as the top three services they value most. However, when asked to rank the same aspects of the relationship (on a scale of 1-10), Advisers ranked effective communication and engagement with the plan as their 6th and 10th highest priorities. For their part, the Advisers surveyed rated “responsiveness” as their best value-adding trait. However, among Plan sponsors adviser-responsive ranked as an area of least concern (perhaps because clients have learned to expect responsiveness from financial advisers).

More than half of the advisers surveyed said they found it difficult to provide effective communication with easily understood explanations, while another third said they struggled to show engagement with the Plan. Unsurprisingly, 70% of the Advisers surveyed also admitted that keeping up with their regulatory and compliance responsibilities is one of the greatest challenges they face.

The great challenge that Advisers face in meeting Sponsor expectations– particularly their expectations with respect to the management of compliance and regulatory issues—has only been aggravated by the Department of Labor’s new Fiduciary rule. According to Ron Cohen, RIA and CEO Sales Manager for Wells Fargo Fund Distributor, the new DOL rule not only creates additional compliance issues for advisers, but also intensifies the competition amongst those financial advisers who already struggle mightily to differentiate themselves: in the DOL-generated sea of fiduciaries, those advisers who were always fiduciaries can no longer distinguish themselves on the basis of their fiduciary status. Meanwhile, as many advisers clamor for clarity on the new rules, their client-sponsors are left wanting for the additional services they value most.
For the majority of advisers, retaining a team of experienced compliance professionals will relieve many of the regulatory burdens they encounter and offer them more freedom to focus on the services that clients value most. At Red Oak Compliance Solutions, we can assist you with all aspects of your compliance needs, from registration and CCO training to the implementation and maintenance of your very own custom compliance program. If you have any questions regarding the current condition of the regulatory landscape or would like any assistance with your compliance needs, please call us at 888.302.4594 (or email us at sales@redoakcompliance.com), and we will be happy to assist.

About Red Oak Compliance Solutions

Red Oak Compliance Solutions is the global advertising review software of choice in the financial services industry. It is a comprehensive suite of SEC 17A-4 compliant features that are 100% books and records compliant and provides clients with 35% faster approvals and 70% fewer touches or better. We also offer Smart Review(SM), which solves for the storage and maintenance of disclosures, helping firms reduce risk, decrease review times, and increase the speed of distribution of marketing materials. Smart Registration(SM) automates the licensing and registration management process to help reduce regulatory risk and time spent on manual processes. Overall, Red Oak allows firms to minimize risk, reduce costs, and increase compliance review process effectiveness and efficiencies.

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