The financial services world is being reshaped, and the evolving environment is pressuring the bank channel to significantly change its business model. Some will resist and fade from relevance. Others will embrace the change, pivot their businesses and potentially emerge stronger than ever.
The fiduciary rule will, in a nutshell, increase costs and likely decrease revenue. “Business as usual” isn't going to cut it anymore from a profit margin standpoint. Moreover, it will be very difficult to base your business model on BICE exemptions and variable commission-based revenues. The only thing that will justify charging some clients more than others will be enhanced levels of service. The upper levels of service will generate revenues with healthy profit margins, and the lower levels of service will generate revenues with volume but much lower profit margins.
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