DOL Fiduciary Redraft Opposed by 90% of FSI Advisors: FSI Poll

Poll of FSI advisor members predicts GOP will gain control of Senate in midterm elections

FSI CEO Dale Brown. FSI CEO Dale Brown.

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  • Disaster Recovery Plans and Succession Planning RIAs owe a fiduciary duty to clients to prepare for disasters and other contingencies. If an RIA does not have a disaster recovery plan, clients’ financial well-being may be jeopardized.  RIAs should also engage in succession planning, ensuring a smooth transaction if an owner or principal leaves.   
  • Client Communication and Miscommunication RIA policies and procedures must specify what type of communications should be retained. The safest course of action is for RIAs to retain all communications—to clients, from clients, and about client accounts.  To comply with fiduciary obligations, communications must be thorough and not mislead.

Independent advisors remain opposed to the Department of Labor’s pending rule to redefine the term fiduciary under the Employee Retirement Income Security Act, and they also predict that Republicans will gain control of the Senate in the upcoming midterm elections, according to a just-released poll by the Financial Services Institute.

The poll of FSI advisor members was released Wednesday and gauged advisors’ attitudes on the midterm elections as well as “critical industry issues” they face. When asked by FSI if they believed DOL should "redefine the definition of 'fiduciary' for financial advisors effectively banning the earning of commissions on IRA advice," 90% of respondents said they were opposed to the DOL’s redraft. Ninety-one percent of advisors said they opposed the DOL redraft in FSI’s 2013 poll.

(FSI polled its 37,000 advisor members for the survey in mid-June; 2,331 responded.)

Industry officials recently told ThinkAdvisor that the White House’s National Economic Council will be performing “industry outreach” regarding DOL’s redraft, and that the NEC is part of a White House working group that’s focusing on DOL’s fiduciary rulemaking. The redraft release date has been pushed to January.

“Our independent financial advisor members have a unique vantage point on these issues as they work closely with Main Street American investors on a daily basis,” said Dale Brown, FSI’s president and CEO, in a statement. Advisor opposition to the DOL’s fiduciary proposal “has also held strong over the past year. We see no sign of complacency creeping in as the rule is postponed yet again.”

Sixty-six percent of advisors polled said that the Republican Party will gain control of the Senate after the elections in November, while less than half of advisors (43%) said equities will have a “strong show” during the remainder of 2014.

On other critical issues they face, only 41% of advisors said that they had a succession plan finalized and in place, and 15% of advisors said they planned to retire or sell their practice in the next one to five years.

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Check out Are 401(k) Revenue-Sharing Deals on Their Way Out? on ThinkAdvisor.

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