The Department of Labor fiduciary rule will usher in a new era in which product sales will be secondary to the advice process.
That was the word from David Macchia, CEO of Wealth2k. Macchia's presentation on "DOL: The Silver Lining" concluded the 2017 LIMRA Distribution Conference in Ft. Lauderdale.
The DOL rule creates an urgency for simplification and transparency in the retirement planning process, he said. Clients must truly understand what they are buying.
Read the latest on the DOL rule here.
The fiduciary rule is putting pressure on advisor fees and commissions but the focus on advisor fees doesn't address the biggest challenge facing retirees, Macchia said.
"A low-fee portfolio doesn't protect a retiree from going broke in retirement," he said. "The number one key to serving retirees' best interests is mitigating their risks."
Generating retirement income for clients will be the most important thing advisors can do to serve clients' best interests and thrive in the DOL environment, Macchia said.
"Retirement income isn't a product, it's a process," he said. "You must connect the process to the right customer and link each product recommended to a specific context and purpose in a client's portfolio."
The DOL rule is "an unexpected gift to the business of retirement income," Macchia said, as the advisor who can provide retirement income advice has the ability to disrupt a client's existing advisor relationships.
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com.
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