How will the new U.S. Fiduciary Rule impact financial documentation?

For the Financial Services industry and its advisors, this year heralded new compliance and governance requirements in the form of the new Fiduciary Rule, which has been partially implemented by the U.S. Department of Labor (DoL). The Ruling means that financial advisors engaged in retirement plans, or those providing retirement planning advice to consumers, will need to focus even more on reporting, disclosure, record keeping and other areas to meet compliance and governance requirements. The net effect means that detailed and accurate documentation has never been more important to meet the new standards that have been put in place within the industry.
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A new set of Federal rules is presenting new challenges for financial advisors, who must now  focus on creating a “culture of compliance” in which advisors will seek to document clear, specific and transparent action plans and disclosures with their clients.

Going forward, advisors need to accurately document conversations with clients, and also be more thorough and impactful in the financial plan they deliver back to them.

The Fiduciary Rule – partially implemented on June 9 – raises the compliance and governance stakes.   At its core, the ruling seeks to mitigate potential conflicts of interest by mandating financial advisors, including brokers and insurance agents, put the interests of their clients ahead of their own when handling retirement

Planning for retirement is big business.  According to the Investment Company Institute, U.S. retirement assets today total $26.1 trillion.   Similarly, The 2016 Fidelity RIA Benchmarking Study revealed $1 trillion of assets under management is projected to transfer to Gen X/Y individuals every year through at least 2050.

Increasingly savvy consumers are asking advisors to take a chain-of-custody mindset in the handling of their assets – how and where their assets are bought, sold and/or transferred amongst various investments; all of which requires detailed documentation capture.

The industry is also seeing a marked shift from commission to fee-based revenue, according to the 2016 Fidelity RIA Benchmarking Study.  This will likely accelerate with the Labor Department’s ruling, and increase competition for independent advisors.  In this climate, personalized service and trust in the client/adviser relationship is paramount.

This culture of compliance will come with increased demands on time and, potentially, cost.  Financial advisors will be held to an even higher standard of accountability, and documentation solutions, like Nuance speech recognition, among other tools, can help.

Today, many financial service Institutions use solutions like Dragon Professional Group as part of their business repertoire. With the ability to complete accurate reports and other documentation – all by voice – these tools can only help advisors gain more control over documentation, and help produce beneficial outcomes; namely, meeting compliance mandates, but probably even more importantly, a better customer experience.

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Mark Geremia

About Mark Geremia

Mark Geremia is Vice President and General Manager for Dragon Professional and Consumer, and oversees the product and marketing strategy for Nuance's Dragon NaturallySpeaking portfolio, the world's leading speech recognition and documentation solution for PC and Mac. Mark has held various leadership roles within the Dragon business over the last decade, and with his team continues to expand Dragon's reach across enterprise, legal and law enforcement markets, transforming productivity and documentation accuracy for professional individuals and large organizations. Prior to joining Nuance in 2005, Mark held key marketing management positions at both large and small technology companies. He holds a Bachelor of Science Degree in Business Management from Bentley College.