Now that broker-dealers can market themselves as having their clients’ best interest at heart, thanks to the SEC’s recently approved Regulation Best Interest, RIAs will need to step up their efforts to differentiate themselves, experts say.
The regulator’s overhaul of investment advisor and broker conduct lets brokers tell clients that the advice they offer is in their “best interest” without actually having to register as fiduciaries, panel experts said in a recent webinar hosted by the Institute for the Fiduciary Standard, according to FA magazine. Broker-dealers are now likely to ramp up marketing and social media outreach to target RIAs’ clients, according to the panel, the publication writes.
“Brokers will be releasing an unprecedented amount of consumer education. Their tagline will be ‘our standard is best interest and it’s better than yours [advisors],’” said Knut Rostad, president of the Institute for the Fiduciary Standard, according to FA magazine.
To fight back, RIAs need to effectively demonstrate what makes the fiduciary standard superior, according to Rostad, the publication writes. And to do that, RIAs should eschew legalese and “hackneyed terms,” “re-engineer” their marketing language with a focus on their values and philosophy and highlight brokers’ conflicts of interest, Rostad said, according to FA magazine.
“Brokers sell and sell hard, but as fiduciaries you must enlighten and get the message out to the public that if you work with a broker you’re being sold,” said Allan Slider, founder of FeeOnlyNetwork.com, according to the publication. “We don’t do enough to enlighten that brokers sell products. This has to start with you and your website.”
Slide also suggested that RIAs write blogs, share posts and write comments to put out “a unified message to real people,” FA magazine writes. Marie Swift, president of the public relations firm Impact Communications, suggested advisors reach out to local media — and consider wearing a t-shirt she created that says, “RELAX I’M NOT A BROKER,” according to the publication.