A Look at Advisor Group and How They’re Helping Us Better Serve Our Clients as the DOL Fiduciary Rule Nears Closer

As Independent Financial Advisors, we must choose a Broker/Dealer to work with.  There are countless options, but only one that provides the level of service and support that meets our standards.  Advisor Group is one of the nation’s largest networks of independent financial advisory firms serving over 5,000 advisors with approximately $160 million under management and is comprised of our Broker/Dealer, SagePoint Financial, as well as FSC Securities, Woodbury Financial, and Royal Alliance.  As SagePoint Financial advisors, we’re able to provide outstanding value to our clients more now than ever before due to their prompt and effective reaction to recently proposed changes in our industry.

As you may have heard, in 2016 the Department of Labor released a rule that requires all financial advisors to abide by a fiduciary standard when providing investment advice to clients regarding their retirement accounts.  This rule is meant to protect investors by virtually eliminating the conflict of interest that may exist when advisors earn commissions on certain investment products.   This rule, although intended to help clients, also hinders advisors in some circumstances and doesn’t necessarily help all investors.  That’s why Advisor Group is taking steps (and leaps) to make the proposed industry changes as painless as possible for its advisors (us).  Advisor Group is supporting its advisors and their clients by continuing to support commission-based businesses so that we can provide our clients a choice in how they engage with us and pay for their investment advice and funds, all while remaining compliant with the new rule.  On the other hand, many firms including big names like Merrill Lynch have done away with providing their customers a choice for how they pay for investment advice and services by simply eliminating commission-based investments from their platform.

In certain cases, the consumer is better off having the option to pay a commission rather than a fee.  Smaller investors might save money by paying a one-time commission instead of a fee every single year despite how inactive/passive the management may be.  Many investors follow a buy-and-hold strategy meaning their fee-based advisor would be earning money without providing any ongoing advice.  Every situation is unique which is why we’re excited to give that choice to our clients, unlike many advisors today.  Advisor Group has taken on the huge task of building a platform that is both compliant with the Department of Labor’s new rule and still allows our clients to choose between fee-based and commissionable investing.  It seems pretty obvious that having a choice is better than not.

In a recent press release, Advisor Group’s new President and CEO, Jamie Price says “This is an inflection point in our industry that provides us with an unprecedented opportunity to differentiate ourselves and help our advisors to do the same. I could not be more excited for the future of our firm and the advisors we work with every day”  referring to the industry changes and how we will overcome any challenges it presents.  Our firm is making multiple improvements in order to support its advisors’ businesses such as introducing new platforms, products, and pricing. For example, in 2017 Advisor Group is launching the Genesis Series, a new advisory product with lower minimums at $5,500 that will give our clients access to institutional strategists that would normally require a $50,000 or $100,000 investment.

We are proud to be part of a company that provides fee-based advisory services as well as a low-cost commissionable brokerage platform — which is what we need as advisors in order to properly serve our clients, both large and small.  Clients investing half a million dollars will likely benefit from fee-based management, but smaller clients who have $25,000 under management, for example, may be better off paying commissions for trades assuming they are long-term investors.  

As SagePoint Financial and Advisor Group advisors, we have a great advantage over those advisors who do their business with a firm that simply eliminated their commission platforms.  We are excited to remain truly independent, not only in the form of what investment products we offer our clients, by how they are charged for them as well.