What does it mean for an advisor to truly “serve” a client? To answer that, let us look at the third gift that the DOL offers, for it is a gift that keeps on giving. Over the last 20 years, the transition from commission-based to fee-based business in financial services has taken priority in many practices. One of the most powerful reasons clients are better served through a fee-based relationship is, in the words of my trainer, “it puts the advisor and client on the same side of the table.” In other words, a fee-based advisor has a much lower temptation threshold to generate trades resulting in commissions.
Being on the same side of the table, however, has a much larger connotation when it comes to implementing the DOL rule. That same side also demands advisors pitch their tent with clients no matter where the client journey goes. Effective advisors are itinerant, changing and migrating to wherever the client’s life and circumstances lead. Job number one is not to lead the client where we want him or her to go, but to discover where the client is going and then go where that takes us.
I call this concept servant leadership. Servant leaders choose to always be learning more about the client’s life because that learning leads to a deeper, more effective level of serving. In an oddly counterintuitive way, we lead by following, advise by listening, learn by asking, bond through community-building, and grow our business by caring more for those we serve than what we may earn in any given month.
The DOL rule will, barring any changes from the incoming Trump administration, become the rule by which advisors relate to clients in 2017 and beyond. There is nothing in this change to fear and much to celebrate. Make change your friend. Invite the DOL rule and others that may follow to guide you in reimagining your practice. Start by implementing incremental change, asking more life-story questions, being intentional about going to where the client is rather than having the client come to your office. In so doing, you will find new ways to serve, new avenues down which your business will grow, and a new sense of fulfillment in your advisory profession.