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The Fiduciary Rule: The Effect on Financial Recruiting

As of now only financial professionals and firms who are registered as investment advisors are required to follow the fiduciary standard. This standard requires that these financial advisors put their clients’ best interests ahead of their own profits. However, beginning next April with this new rule fiduciary rule all financial professionals who offer investment advice for retirement accounts must also follow the fiduciary standard.

How will this new fiduciary rule affect recruiting? Well, over time hiring firms will begin to reward advisors with a business model that matches this new standard. As the trend towards larger fee-based accounts increase advisors’ may see a decrease in their incomes. Advisors who begin to earn less will be more likely to accept a new position at a rival firm if they receive a recruiting bonus. However, it is important to note that under the new standards financial advisers who are switching firms and are receiving large upfront checks will be required to justify that move with regards to retirement accounts. Essentially, wealth advisors will have to demonstrate how their clients will benefit from their decision to move firms. This may alter how companies hire financial advisors and affect the way that financial advisor headhunters recruit.

Another way in which the rule may affect the advisor recruitment market is that wealth advisors who are already considering making a move to another firm will be considering moving their timing for that move sooner. This new regulation will create more policy changes and a ton of new paperwork for both the clients and advisors; so in order to avoid having to do double the amount of paperwork, financial advisors who are looking to change firms will most likely want to make that move before their current firm make those changes. Especially since document completion would be a one-time event and less cumbersome at the new firm when their clients sign a completely different set of documents. Are you looking for financial advisor jobs or stock broker jobs? If so, we would suggest that you make a push towards securing a position before the fiduciary rule takes effect. On the other hand, if you are a firm looking to staff your company we would take this time to find financial advisers, stock brokers, and wealth advisors as soon as possible. As the best financial advisor recruiting firm in Chicago and the US,

Are you looking for financial advisor jobs or stock broker jobs? If so, we would suggest that you make a push towards securing a position before the fiduciary rule takes effect. On the other hand, if you are a firm looking to staff your company we would take this time to find financial advisers, stock brokers, and wealth advisors as soon as possible. As the best financial advisor recruiting firm in Chicago and the US, we are taking this new fiduciary rule very seriously and will be altering our headhunting and placement process accordingly.

About Michael A. Terrana

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