Last year LPL Financial became one of the first firms to get behind the fiduciary rule, announcing a slew of pricing and other changes to its investment platforms before the rule was even passed.
Now that the rule's fate hangs in the balance, many are wondering: Will the firm reverse some of its early business decisions?
Not a chance, says Arthur Osman, a top executive in the LPL division that supports banks and credit unions.
"There are no plans to undo any of those changes because we feel that they help us work toward the best-interest standard," he said in a phone interview from Fort Lauderdale, Florida, where LPL was hosting its annual conference for program managers and bank and credit union executives.
"We feel as though they help us remove the potential for conflict and we believe they have made our overall platform more competitive," he said.
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The large community bank will look to LPL to help the investment services business meet the requirements of the fiduciary rule.
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President Dan Arnold will be tasked with managing the rollout of new digital technologies and implementing the fiduciary rule.
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Osman doesn't think that financial institutions that opt not to switch to a fiduciary standard — should the rule be watered down or rescinded — will have a strategic advantage over LPL and its partner banks and credit unions that did make the costly switch.
"Those that haven't made changes and look to make no changes unless forced to will be at competitive disadvantage," he said.
Indeed, bank wealth executives agreed with the theme of the conference, which centered on the need to reinvent and reposition investment services programs, according to Osman.
"Institutions that have a long-term view of the business subscribe to the need for evolution and the best-interest standard," he said.
News from the White House about a potential delay won't lead the firm to stray from its course, with plans expected to move forward as intended. In the event that it is delayed, the firm will have the opportunity to implement the plans in a more measured way.
Osman noted that if the rule is delayed, the firm would be able to spend more time in the area of product standardization. The firm began work late last year to standardize the way products are manufactured. In 2016, it looked at variable annuities and is now evaluating other product categories, such as alternatives and mutual funds.
"If afforded a delay, it gives us an opportunity to continue that work but not be as rushed to perform it," Osman said.
