Financial Advisors and Investors at Odds Over DOL Fiduciary Ruling

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The future of the DOL fiduciary ruling is anything but certain. We do know, however, that the majority of financial advisors have some concerns about the ruling, with six in ten advisors (60%) favoring repeal. Advisors employed in the broker/dealer channels—particularly the Bank channel (82%)—and commission-based advisors (72%) are most likely to support repeal. In contrast, RIAs, most of whom are predominantly fee-based and already consider themselves fiduciaries, are more likely to oppose repeal (45%) than support it (29%).

Advisors Weigh in on the DOL Fiduciary Rule

The decision to support repeal is not an easy one for firms. Many companies are far down the road in preparation and communication with clients, while others have indicated they will make fiduciary status a point of competitive differentiation. Firms that go back on that messaging could be perceived as not being on clients’ side after all, and hoping clients don’t question the impact of repeal could be very problematic.

In fact, our initial research with affluent investors regarding the ruling indicates that nearly half would only work with a fiduciary going forward while over one-third prefer it. Regardless of the future of the ruling, this shift in preference will create opportunities for advisors acting as fiduciaries. As a result, we’re likely to see a continued shift toward lower-fee investment products.

We’re excited to further explore how shifting regulatory pressures and evolving client expectations will impact advisors’ business practices through a series of follow-up research throughout this year. For more information on how to monitor new competitive forces impacting the financial advisory marketplace, review an overview of our new The Future of the Financial Advisor™ report.


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This entry was posted in Financial Services, Product Development and tagged , , , , by Meredith Lloyd Rice. Bookmark the permalink.
Meredith Lloyd Rice

About Meredith Lloyd Rice

Meredith Lloyd Rice is a vice president in Market Strategies' Syndicated division. She manages the firm’s syndicated research products focused on the financial advisor market and is the lead author of the Advisor Brandscape® report. She has more than 15 years of experience managing research initiatives in the wealth management industry and has explored a wide range of business issues on the client and supplier side. Prior to joining Market Strategies, Meredith was an associate VP at Chatham Partners where she oversaw a team of researchers and managed the overall design, analysis and interpretation of large-scale studies for institutional financial services clients. Meredith earned an MBA from Thunderbird School of Global Management and a bachelor’s degree from Colgate University. She is a former collegiate rower who now gets her exercise chasing after her 2-year-old daughter and Clumber Spaniel.

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