Advisors are all over the place with their views of the DOL fiduciary rule and its potential impact.
During a web seminar hosted by Pioneer Investments that had such industry luminaries as Fred Reish and Blaine Aikin as panelists, the 875 attendees were asked whether the new rule would help, hurt, or be a non-event for their business and for investors.
Fully 38 percent of advisors polled indicated that it would hurt their business and negatively impact profitability, while 27 percent indicated that it would help their business by leveling the playing field on retirement advice. Twenty-one percent indicated that the rules would be a non-event for their business, and 14 percent were unsure of the impact.
“It’s interesting to see that while most advisors believe that this will hurt their business, quite a few also think that it will help level the playing field,” said Reish, ERISA attorney at Drinker Biddle & Reath, LLP.
In terms of the impact on investors, 42 percent of advisors polled believe that the new rule would hurt investors by raising costs and limiting the availability of advice. Thirty-two percent believe that the rule would help investors, and that putting investors’ interests first would drive better outcomes. Eight percent indicated that this would be a non-event, and 18 percent were unsure of the impact on investors.
“The potential for these rules to increase costs and make services less available for smaller accounts was a hot topic of debate even before they were released. The results of this poll demonstrate that, as advisors see and hear more, these concerns linger in the minds of many. Here again though, almost as many foresee either positive or neutral outcomes,” added Aikin, chief executive officer at fi360.
When asked how the fiduciary proposal will affect their IRA rollover business, 42 percent of advisors expect that it will have little to no impact and 28 percent expect a moderate to high negative impact. Only 11 percent indicated that there would be a moderate to high positive impact on their IRA rollover business as a result of the proposal, and 19 percent did not know.
“A key takeaway here is that there are divergent viewpoints on this rule amongst advisors,” said Mark Spina, executive vice president and head of U.S. intermediary distribution at Pioneer Investments. “We firmly believe in the value of advisors, and hence in the importance of providing education and encouraging debate surrounding the new fiduciary proposal.”
The webinar, titled “The New Fiduciary Proposal…It’s out and we’re talking about it,” was hosted by Pioneer on April 30. Of the 875 attendeed, 417 were registered investment advisors (RIA). Retirement plan AUM of those in attendance ranged from $1M to more than $100M, and advisors from all 50 U.S. states joined the event.
See Also:
- DOL Fiduciary Rule Hit With First Lawsuit
- Breaking Down the Basics: DOL Fiduciary Rule
- DOL Final Fiduciary Rules Could Resolve Conflicting Interests in Target Date Funds
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
