Issue link: https://nebusinessmedia.uberflip.com/i/834810
wbjournal.com | June 12, 2017 | Worcester Business Journal 21 Create better retail spaces The Worcester Business Journal welcomes letters to the editor and commentary submissions. Please send submissions to Brad Kane, editor, at bkane@wbjournal.com. I am writing in response to the article "Avoid the Fiduciary Rule" by Nichols College Professor Christine Beaudin and Robert Kuppenheimer in the May 15 edi- tion of the WBJ. In my opinion, the article fails to prop- erly distinguish between investment advisors and investment advisor representatives, who already act with a fiduciary standard, and brokers or registered representatives, who they refer to as "advisors" in the article. Clarification of various roles and impact of the rule is necessary. I have clarified five points made in the article. Investment advisors and investment advisor representatives currently are required to abide by the fiduciary stan- dard imposed by the new U.S. Department of Labor proposed regula- tions that will affect brokers and registered representatives, thus many of these advisors will remain unaffected. Currently, brokers and registered representatives are held to a different standard. Brokers' recommendations must be suitable at the point of sale, but they are not under an obliga- tion to provide ongoing investment advice. Typically, moni- toring the investment falls on the client, not the broker. Clients typically pay a commission for each transaction. Conversely, investment advisors must abide by the fiducia- ry standard which requires them to work in the best interest of the client. Advisors are fully accountable to provide ongo- ing advice regarding the investment holdings for as long as the client remains with the advisor and investors generally pay an ongoing asset-based fee for this level of advice. 1. The article explicitly states that President Trump's delay of the implementation of the regulations are encour- aging. The new proposed rules will require brokers and reg- istered representatives to be transparent and forthcoming with respect to fees and act in the best interest of their cli- ents. Investment advisors are already fiduciaries. 2. The article argues that the new regulations are already practiced on a large scale. The new proposed rules will, for the first time, require brokers and registered representatives to be transparent and forthcoming with respect to fees. 3. The article states "additional costs assumed by the advisors will likely be passed along to the consumer." The costs to clients using fee-based advisors are not likely to change or increase as a result of the regulation. Brokers are paid via sales commissions, which are already being reduced industry-wide due to the proposed DOL changes. 4. & 5. Calling the Department of Labor the "clear win- ner" and saying the "clear losers are the households with IRAs and advisors" in this scenario is questionable. If the proposed changes go into effect after June 9, brokers will be required to act in the best interest of the client. The clear winner seems to be the consumer. Overall, the article raises some valid points, but is over- shadowed by some inaccuracies and broad use of the term advisors. The points I have mentioned are relevant to con- sumers understanding what is happening with the DOL. Christopher P. Provo is president & CEO of Provo Financial Services, Inc. in Shrewsbury. Embrace the fiduciary rule Case in point, the owner of the former Kmart strip mall in Milford off exit 19 of I-495 is spend- ing $20 million to convert the now largely vacant plaza into a more upscale retail destination called Milford Crossing (See Grant Welker's story on page 8). Rather than attracting another big box store to fill the main space, developer RD Management is relying on a Stop & Shop grocery store as an anchor and working to bring in more restaurants to leverage the steady traffic. The key behind RD's Management's renova- tions and new tenants is the company is replac- ing a retailer no longer in demand with a strong new anchor largely immune to online shopping. While consumers can buy groceries online, it is hard to imagine a future where people won't want to see and be able to hand pick items like fruits, vegetables, meats and seafood. As for res- taurants, the industry looks strong. According to the National Restaurant Association, Massachusetts restaurants will do $17 billion in sales in 2017 and grow their workforce 8 per- cent over the next 10 years. Picking the right mix of operators for any retail setting may not be a layup, but you can have an Amazon-proof niche. Other retail establishments falling in that category include exercise centers, walk-in medi- cal clinics, and even merchandise retailers like TJX or Dollar Tree who rely on freshly dis- counted, high turnover inventory. Banks, apparently, have figured out this trend of providing customers with what they want out of retail locations (See Welker's story on page 12). Even with the rise of mobile banking tech- nology, branches are still in high demand – reaching a record high of 1,325 branches in Massachusetts in 2015, the most recent year available – but customers aren't using them as much to deposit checks and get cash. Rather, branch customers are looking for fulfillment to more complex financial requests – like loans and retirement accounts – so banks are ditching the teller-driven model in favor of offering a more highly trained workforce capable of meet- ing these demands in a friendlier setting. The lesson here for all businesses is even as your customers' habits and needs change as a result of new technology and economic forces, you can keep them coming through the doors by evolving and giving them what they are looking for. V I E W P O I N T E D I T O R I A L BY CHRISTOPHER P. PROVO Special to the Worcester Business Journal Christopher P. Provo W WO R D F R O M T H E W E B Comment of the issue "A stringent law and thorough background check is highly needed to uplift the safety of passengers in these app-based taxis." - Joseph Martinez, June 5, on the state's use of background checks for all Uber and Ly drivers WBJ Tweet of the week "We're glad she is staying in Worcester & remaining involved with the @chamberworc" - Worcester Regional Chamber of Commerce (@ chamberworc), June 5, on Sherri Pitcher leaving the chamber for an executive role at Fidelity Bank W Facebook feedback "With many funds moving to sustainability or impact funds, for investment purposes it may be very important." - Matt Doyle, June 1, on whether companies like TJX in Framingham should factor executive leadership diversity into a CEO's compensation package T he rise of online retailers like Amazon has had a direct affect on the world of brick-and-mortar retailing. It started with the deci- mation of booksellers and has helped lead to the troubles of old- school retailers like Sears, several big box stores, and destinations like Worcester's Greendale Mall. The days of people shopping for certain goods in physical locations may be on the way out, but smart developers still can attract a robust retail customer base.