The latest LIMRA survey shows that not only do Americans have a more favorable view of the economy, but the financial services industry is also "slowly earning back the trust and confidence of the American people," according to Jennifer Douglas, associate research director, LIMRA Development and Strategic Research. While only 8 percent of consumers had "an extreme amount" or "quite a bit" of confidence in financial advisors in October 2008, that number rose to 23 percent in the most recent survey of 1,000 adults the insurance industry trade group conducted in January.
Who Will Pay For RIA Examinations?
There's consensus in Washington that RIAs are not examined frequently enough, but there is still a divide about how to make it happen. While U.S. Rep. Maxine Waters, D-Calif., the senior Democrat in the House Financial Services Committee, is expected to re-introduce a bill that would fund the exams by charging advisors a fee, it's not likely to gain much traction. Instead, Charles Schwab's Michael Townsend writes on "RIA Washington Watch" that leading Republicans on the committee, including committee Chairman Jeb Hensarling, R-Texas, want SEC Chair Mary Jo White to reallocate money from less pressing matters to pay the costs and perhaps to allow third parties to conduct the exams.
Don't expect robo-advisors to be big disruptors in the wealth management industry, Advisor Software Inc.'s Andrew Rudd tells Craig Iskowitz of WealthManagement Today. Rudd, who Iskowitz says built what might be considered one of the first robo platforms in 2001, says that the industry will continue to evolve to include a variety of platforms and services to serve all market niches, with full-on robos being just one. The main reasons: They cannot live on millenials alone, they have branding and differentiation issues, it's tough to acquire customers and few understand if there even is a difference between a robo-advisor and an automated investment platform.