RIAs – Learning to Love No-Load Investments

Even though the implementation of the Fiduciary Rule has been pushed back to 2019, many of the country’s largest investment firms have already started making the changes necessary to comply.

It is inevitable that a larger portion of the financial industry will abide by a fiduciary standard. This standard can be a positive shift for the investor as well as the Registered Investment Advisor (RIA), especially if the adviser is continually working to acquire and retain clients by providing a high level of transparency in all information and investments.

Below are some ways RIAs can be more competitive1:

  • Really Listen:  Listen and understand each client’s needs so you provide the most relevant investment information for that investor’s needs.
  • Comprehensive Research:  Technology is such that most investors can find all the information they need on their own. That means you must prove that your advice is spot on and your solid experience in the field can help bring potentially steady returns
  • Show No Bias:  Always provide unbiased research.
  • Transparency:  With the arrival of the Fiduciary Rule, transparency is key since currently about two-thirds of investors do not trust the financial industry to act in their best interests. As an RIA, you can combat this by educating clients and helping them understand the decision-making process.
  • Relevance:  Show how your recommendations are relevant to your client’s desired outcome.

What about No-Load investments?

If investors show a preference for no-load investments, and they already are, current compensation structures in the industry can be impacted. No wonder there’s a sense of apprehension among financial professionals. But there’s no use in dragging your heels. RIAs who embrace the changes necessary to meet investors’ desire to avoid investments with upfront fees are likely to gain greater customer satisfaction and customer trust.

Be Clear

Despite the fact that most advisers are honest with clients, there is still a feeling that they are not. It could be that clients do not always understand the information being provided or the way it’s being presented. So be willing to take a more straightforward approach, and even if you’re not sure it’s necessary, take the extra time to make sure clients understand what you are advising .

Choose the Best Option

There are times when a no-load investment may be the best option for the investor, and sometimes it may not be. But if you present your client with clearly defined information, they feel empowered in the decision to invest their hard-earned money. Transparency is a sign of trust and there is no doubt that consumer trust is a key factor in the success of any business.

Start Now

The early adopters of increased transparency have a head start over those who are waiting until 2019. The financial industry is at a turning point, so be willing to change and learn new ways of doing business in order to survive the regulatory, technological and consumer transformations that are occurring.

Now is the time for RIAs to make the best use of their experience, intelligence, education, research, and interpersonal skills, to ensure each and every client is happy with and understands their investments.


Do you have any questions? Speak with an Investor Relations Representative.

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1 Trainer, David (2017). How the Fiduciary Rule is Good for You. Retrieved from https://www.forbes.com/sites/greatspeculations/2017/12/14/how-the-fiduciary-rule-is-good-for-you/#557f7b6d60c5