With profit margins squeezed, a fiduciary rule in the works and competition picking up, broker-dealers are busy reinventing themselves as full-bodied wealth management servicing firms.

Those that come up short on the task of reinvention may face a tough choice: sell out or transform into a branch office for a larger firm, one that has the scale to compete.

Challenging as the environment may be, the good news is that the turmoil stemming from the U.S. Department of Labor over the past several years is gone, and advisors and firms are refocused on growth, observers say.

Yet the loud debate over a fiduciary standard has sparked questions from clients about how they’re being cared for, says Amy Webber, CEO of Cambridge Investment Research. That, in turn, has prompted some clients to leave those firms or advisors who haven’t stacked up.

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