DeVito: We are starting with what we did with DOL. We
think it fits pretty well, though there is going to be a lot more
that has to be added once we analyze it. It’s been a long haul.
I don’t know how much more best interest we can get into
our procedures. We’ll have to discuss more disclosure, a lot
Stringer: It seems like we’ve been dealing with the standard
of care now for over a decade, … and that the heavy lift we did
was with DOL. We levelized compensation and eliminated a
lot of our conflicts. We feel like we didn’t back off from any
of that. We just didn’t go to the deeper disclosures they were
requiring in that final, final push on DOL. This [Reg BI] doesn’t
feel as scary.
DeVito: We trimmed back product, choices … at the high
end and low end, and big [trailing commissions].
Stringer: A lot of the work has been done. Now we just had
to do the nuanced BI work. The bigger lift is going to be just
educating the advisors on how this impacts their business and
some of the changes that are going to happen. Change manage-
ment is always a little difficult.
Webber: For us, there was a lot of DOL development. Some
of this we implemented, some we made optional and that some
advisors implemented, ... and some that we set aside until we
saw what this final rule looked like.
We still feel pretty strongly that we have to get further guidance from the SEC, as there’s a lot of ambiguity there. We are
creating a long list, along with the Financial Services Institute
and other firms, of some places where we would like clarity.
We actually created a risk committee within the firm. That’ll
probably be a permanent fixture, just like an investment committee or due diligence committee, so that we can just constantly be evaluating these things.
One thing on the advisor side that will be most intriguing is
that we’ve got to automate the decision tree that they use. We
know duty of care and duty of loyalty; advisors have rationale
behind the decisions that they make. But our interpretation
thus far is that that documentation needs to exist right out of
the gate for why you choose advisory over non advisory. We
IA: What are your thoughts on Reg BI, which has July 30, 2020, as its start date?
Webber: Amazon is a good example of how technology did
drive [change], because customers demanded a more technological, digital way of doing business. But that intimacy and the
customization that everyone in this room has worked so hard
to deliver, regardless of whether that’s picking up the phone
or offering some sort of electronic portal — depending on the
demands that are coming in from your clients, that is going
to be a win, I believe. This is why many firms no longer exist;
they were trying to put everything into one box and make it
look one way.
Stringer: Sometimes firms are hiding behind their technology. One of our fundamental behaviors is that we have in our
firm’s practice the human touch, which is really a key component to the advisor and client experience.
Dolber: I agree with you. If I look at our service center,
there are people answering the phones, but the technology
we use is Salesforce to get the metrics; that technology is not
visible to the customer, but it’s the way we analyze root causes
of issues. If I’m not looking at why they’re calling and categorizing it, I can’t fix anything. But overall, our business is about
people. We pick up the phone, answer the phone and talk to
Stringer: We call it service recovery, when we look at a
service issue. How quickly can you recover? Because you
can actually turn those things into a gift and turn them into
a positive — if you recover well. That’s a process we work
on, because people make mistakes; it just happens. You can
work on how you fix it. How do you make it better so that
there’s a better client experience?
Webber: Our goal is to use automation even to the extent
of machine learning to do the day-to-day easy stuff. But
humans still have to be involved and engaged on the sophisticated side for trying to bridge gaps. We’re [also] building
sophistication in our service model and are working to make
sure that it’s running in a more automated fashion; our clients, our advisors and their investors are demanding that
access, and a lot of that service access is on their phones
today. It’s mobile.
We’ll actually allow the investors, if the advisor enables it,
to literally open the account. Now, not one advisor has come
forward yet and figured out that they want to use that as a
prospecting tool. Most advisors … would like to meet someone
before opening an account. So, it’s got to have those bumper
bars in place.
DeVito: As for technology, we’re called a fast follower.
We’re more focused on the client — my client being advisor. We’re going to make mistakes on basic processing at
times, but we apologize. For us, it’s been focused on getting out to the advisor and finding out where they want to
go, what are they looking to do and how are they running
We help with our advisor marketing and practice-man-agement program. We’ve had tremendous success with that,
where our advisors are growing like crazy. It’s really a coaching program, but it teaches some tech and marketing. You then
add a virtual assistant.