DOL Rule: 3 Things Financial Advisors Should Do Now to Improve Conversations

Even though the implementation of the DOL Rule enforcement has been delayed, transitioning your sales culture to create greater transparency is no longer an option.

The Department of Labor’s (DOL) Fiduciary Rule, which requires that advisors act in the best interests of their clients and put their clients’ interests above their own, represents just one shift among many in a rapidly changing financial services market, one that is creating new expectations and challenges for even the most experienced advisors.

The question is, do your advisors have the skill set and mindset they need to be successful going forward in this new environment?

Even though the implementation of the Fiduciary Rule’s enforcement has been delayed, transitioning your sales culture to create greater transparency is no longer an option. It’s what your clients expect—from your organization and from the advisors who are working with them.

Most financial services organizations have already begun making significant changes as a result, including to marketing plans, product portfolios and advisor compensation. All of these are important. But there’s another element that’s been more challenging to change: the conversations advisors have with their clients.

As we all know, changing the behavior of people is far more difficult than changing rules and procedures. But failure to fully address this critical component is leaving many organizations exposed.

While most have provided advisor training to build awareness of the new regulations, simply giving advisors information about what they should be saying and should be doing is not enough. What we’ve seen over the past year is that the vast majority of advisors haven’t significantly changed their actual selling behaviors. Organizations that truly want to act in the best interests of their clients need to begin equipping their advisors with the communication skills they need to have effective conversations with their clients. This will be key to being able to uncover client needs and present solutions that are truly in their best interest.

Pete Novak, a top performing General Agent from Charter Oak/MassMutual, puts it this way: “You need to ask the right questions to fully understand where the client is and where they want to be. You can’t just sell product any more. Unfortunately, you still have too many advisors out there talking about product because that’s what they’ve been doing for the past ten years—and have been successful doing it.”

This is a dramatic shift for many advisors. Holding back on product discussions and conducting a well-planned diagnosis of a client’s personal economy requires a different skill set and mindset from previous years. As one VP of Sales at a Fortune 500 investment firm told us, “Honestly, many of them are just not equipped with the skills needed to be successful in the future.”

Here are three things you can do right now to help your advisors change their conversations with their clients and better align with the DOL Fiduciary Ruling:

  1. Translate your organization’s stated values into actual advisor behavior. Many organizations espouse their values on their website, on the walls of their company’s lobby and in marketing material. You’ll see words like “Integrity”, “Ethical” and “Client First.” These are admirable and essential qualities for a financial services organization to have. The key, though, is turning these important values and ethical standards into the foundation of the customer conversation in a way that’s visible to customers. Some examples include:
  • Understanding customer’s wants or needs must always precede any attempt to sell.
  • Selling isn’t something you do to people; it’s something you do for and with
  • Truth, respect and honesty provide the basis for long-term selling success.

Too many selling and consulting models can steer well-intentioned advisors away from what they know in their hearts is in the best interest of their clients. Only with a foundation of strong values and ethics, translated into specific measurable behaviors, can organizations then implement a customer-focused sales communication model.

2. Upgrade your questioning model. The vast majority of advisors have a sincere desire to do the right thing for their clients; they want to help their clients achieve their financial and life goals. Their challenge is that years of prior selling habits are hard to shake.

Advisors now need a questioning approach that goes beyond the diagnostic models clients can find by themselves on dozens of financial planning websites. Equipping advisors with basic questions to understand needs is a good first step, but it’s no longer enough. They also have to be able to help their clients honestly discuss their current and desired situations, the consequences of not changing course, and the benefits of doing so—all in a manner and language that resonates with the client.

3. Change behavior; don’t just give information. Don’t fall into the trap of assuming that a seminar or series of online modules will change what your advisors actually say and do when meeting with clients.

To change behaviors, ongoing repetition, reinforcement, coaching and accountability have to be woven into any training program. This can be accomplished through a series of structured follow-up sessions that build accountability for application of new concepts. It’s also critical that leaders continuously model and coach to key concepts to make sure new behaviors stick.

The DOL Fiduciary Rule’s goal is have advisors act in the best interests of their clients. But even if the Rule is never fully implemented or enforceable, the demands for transparency will continue to grow. The organizations that make the commitment to give their advisors the skills they need to better understand their clients’ needs will rise above the rest of the field and provide the greatest value to their clients.


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