JERSEY CITY, N.J., Nov. 28, 2017 /PRNewswire/ -- A new survey of
financial professionals1 released by BNY Mellon's
Pershing today reveals that the financial services industry has yet
to fully embrace initiatives that will make it relevant to the next
generation of investors. Further, regulatory uncertainty may be
overshadowing some of the longer-term challenges facing the
industry.
According to the study, titled "Business Transformation:
Navigating A Path Forward," which was conducted for BNY
Mellon's Pershing by the research and advisory firm Aite Group,
uncertainty in the political and regulatory landscape is cited as
the main challenge to business by 71 percent of respondents,
followed by the Department of Labor (DOL) Fiduciary Rule (67
percent), and an aging client base and difficulties in reaching
young clients (65 percent).
The majority (68 percent) of financial professionals responding
to the survey acknowledge that reaching new and untapped investor
segments will be a key factor in driving growth and that developing
a digital advisory platform would help them acquire Gen Y clients
(62 percent). Yet, about a quarter (24 percent) of respondents are
not considering leveraging a digital advisor platform. Further,
only three percent are using a digital advisor platform and a mere
two percent say their practice has made the decision to launch
one.
"The findings largely reaffirm what we are seeing in the
marketplace," said Rob Cirrotti,
Managing Director of Investment and Retirement Solutions at BNY
Mellon's Pershing. "Firms have spent a fair amount of time adapting
to the changes in the regulatory environment. Now, it is time
to move beyond the regulatory uncertainty. We must engage in a
wider conversation about how technology and talent can create the
scale and efficiencies needed to transform the business for the
future."
Additional key findings of the survey include:
The industry has adapted to the DOL Rule and accepted the
fiduciary mindset. A majority (64 percent) of respondents who
serve retail retirement accounts indicate that their firms have
implemented the necessary process and documentation changes related
to investment or rollover recommendations. Further, a significant
number of respondents (43 percent) who service retail retirement
accounts say they would like to see the fiduciary standard be kept
alive—even as they would like to see the Rule revamped.
Regulatory changes have led to the re-evaluation of business
practices and models. One main impact of regulatory change has
been the accelerated move toward advisory, according to 35 percent
of respondents, followed by the creation of governance and
oversight models (33 percent).
Financial professionals do not see the DOL Rule making a
major impact on product choices. More than half the respondents
(55 percent) who service retail retirement accounts indicate that
there will be no change to their product selection for retirement
accounts if the DOL Rule gets implemented in its current version.
Meanwhile, about nearly one quarter (24 percent) indicate that
there will be an increase in product selection and about a fifth
(21 percent) say there will be a decrease if the Rule is
implemented in its current form.
Financial professionals are mostly all talk when it comes to
digital technologies. Almost three quarters (71 percent) of
respondents say they are interested in leveraging a new digital
advisor platform over the next two to five years. Further, more
than half (53 percent) of business owners or financial advisors
involved in strategic decision making at their firms indicate that
speeding up the implementation of new technologies is a high
priority for their firm. That said, only three percent of all
respondents say they are using a digital advisor platform and only
two percent say they have made the decision to implement one.
The importance of talent in driving growth is overlooked.
Only 15 percent of all financial professionals responding to the
survey say investing in strategic talent acquisition and
development to increase capacity is a major factor in driving
growth. Meanwhile, 38 percent say it is either not a factor or a
minor factor.
For more information, please visit
https://www.pershing.com/perspectives/five-key-themes-of-business-transformation.
Survey Methodology
The survey was conducted by Aite Group among 290 U.S. financial
professionals from broker-dealers, banks, insurance firms, and
registered investment advisors during the month of July 2017. The survey gauged financial
professionals' sentiments around, and their response to, the shifts
in the business and regulatory environment, as well as their
attitudes toward new technologies.
About BNY Mellon's Pershing
BNY Mellon's Pershing and its affiliates provide advisors,
broker-dealers, family offices, hedge fund and '40 Act fund
managers, registered investment advisor firms and wealth managers
with a broad suite of global financial business solutions. Many of
the world's most sophisticated and successful financial services
firms rely on Pershing for clearing and custody, investment and
retirement solutions, technology, enterprise data management,
trading services, prime brokerage and business consulting. Pershing
helps clients improve profitability and drive growth, create
capacity and efficiency, attract and retain talent, and manage risk
and regulation. With a network of 23 offices worldwide, Pershing
provides business-to-business solutions to clients representing
more than 7 million investor accounts globally. Pershing LLC
(member FINRA, NYSE, SIPC) is a BNY Mellon company. Additional
information is available on pershing.com, or follow us on
Twitter @Pershing.
About BNY Mellon
BNY Mellon is a global investments company dedicated to helping
its clients manage and service their financial assets throughout
the investment lifecycle. Whether providing financial services for
institutions, corporations or individual investors, BNY Mellon
delivers informed investment management and investment services in
35 countries and more than 100 markets. As of Sept. 30, 2017, BNY Mellon had $32.2 trillion in assets under custody and/or
administration, and $1.8 trillion in
assets under management. BNY Mellon can act as a single point of
contact for clients looking to create, trade, hold, manage,
service, distribute or restructure investments. BNY Mellon is the
corporate brand of The Bank of New York Mellon Corporation (NYSE:
BK). Additional information is available on www.bnymellon.com.
Follow us on Twitter @BNYMellon or visit our newsroom
at www.bnymellon.com/newsroom for the latest company
news.
1 The study surveyed 290 U.S. financial
professionals from broker-dealers, banks, insurance firms, and
registered investment advisors.
Sanuber Grohe
+1 201 413 2247
sanuberbilguvar.grohe@pershing.com
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SOURCE BNY Mellon