Once a company has identified the categories of customers it wants to attract and retain, most people would agree that providing effective service is important. After all, it is hard to expand enterprise value without a healthy growth in cash flow. While this is a truism for nearly all industries, financial advisory executives are thinking hard about this topic right now as the operating environment is poised to significantly change.

According to “DOL Fiduciary Rule Set To Shake Up Retirement Marketplace” (LifeHealthPro, February 24, 2016), “Experts say that the rule will be approved soon and many of the changes will be implemented by year’s end…” If true, some organizations could exit certain activities or otherwise alter the way they do business. This means that an existing customer may be forced to go elsewhere. Some suggest that compliance costs incurred by financial service companies will be passed along to the end-user. Whether that happens will depend on a variety of factors, including the bargaining power of the consumer and the “stickiness” of the buyer-seller relationship.

Technology is another consideration. Robo-advisors are predicted to gain a slice of the “estimated $250 billion to $600 billion of IRA assets” up for grabs should full service firms decide to jettison clients with low account balances. See “Who Wins, Who Loses With New DOL Rule? $3 Trillion in Play” (ThinkAdvisor, December 31, 2015.) Even before talk about a possible passage of the Conflict of Interest Rule, larger firms were hungry acquirers of financial technology companies. Michael Kitces describes a flurry of these recent deals in “Top Financial Advisor Issue For 2016 – The Department of Labor Fiduciary Rule and the Best Interests Contract Exemption” (Nerd’s Eye View blog, January 4, 2016).

Greek philosopher Heraclitus supposedly said “There is nothing permanent except change.” Given what is going on now in financial advisory land, this is indeed true – not just for service providers but possibly for their customers as well.