Financial advisors must do a better job of communicating the value they provide if they are going to remain viable long term. That was the word from Robert DeChellis, the new chairman of the Insured Retirement Institute, at the organization's annual meeting today.
Advisors have come under more scrutiny from regulators as the Department of Labor prepares to implement its fiduciary rule next April and the Securities and Exchange Commission prepares its own rule, likely set for release in 2017.
“There has never been a greater need to demonstrate value than today,” DeChellis told the conference attendees.
DeChellis was one of several panelists who spoke during a panel discussion titled “Capitalizing on Chaos: A Look at the Future of the Industry.”
The IRI, which represents variable annuity manufacturers and distributors, will need to redirect its energy to financial advisors at a time when the value of a financial advisor has never been questioned more.
Changes facing the industry are the most far-reaching the industry's had to face in "decades, decades, decades and decades," IRI President and CEO Cathy Weatherford said in welcoming remarks.
DeChellis took a page out of the playbook of Bill Gates, who once said that his vision for Microsoft was a desktop in every home and that his mission was the Windows operating system everywhere. DeChellis said IRI’s vision is to make sure every American has a robust financial plan and that each plan is curated by a trusted financial professional.
DeChellis, president of Allianz Life Financial Services, called the case for value the single most important task facing financial advisors. Advisors face the biggest industry upheaval in 40 years as regulatory agencies sharpen their rulebooks.
The IRI will need to help advisors broaden the conversation to talk about retirement planning, and not just retirement, said Benjamin Huneke, a managing director at Morgan Stanley.
Morgan Stanley advisors are having one conversation with clients across the entirety of a client’s asset base instead of separate discussions with insurance managers, asset managers and tax experts, he said.
Internet-based investment planning algorithms will take some business away from advisors, but will never replace a skilled advisor, the panelists said.
As clients accumulate more wealth, personal advisors play a commensurately more important role in dispensing bespoke personal advice, according to the panelists. It's no accident that financial advice companies dependent on algorithms have trouble retaining clients with more than $100,000 in assets, they said.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at firstname.lastname@example.org.
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