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June 26, 2017 at 12:16 AM
Financial advisors see the path ahead with the Department of Labor fiduciary rule as requiring some “elbow grease.”
A new report from Aite Group, DOL Fiduciary Rule: Survey on Financial Advisor Sentiment, focuses on the public debate that continues regarding the rule and on how financial advisors feel about the challenges they face as the rule becomes enforceable.
This report focuses on the responses of 152 financial advisors who service retail retirement accounts and state they are familiar with the impact of the fiduciary rule in relation to working with clients. The online survey was conducted from April to May 2017 and includes advisors from various financial firms, such as broker-dealers, banks and insurance firms, as well as independent RIAs.
“Although no doubt painful, the DOL fiduciary rule has furthered the fiduciary concept in the industry — to the industry’s benefit — when trust-building is critical,” Denise Valentine, Aite Group senior analyst, said in a statement, adding that “financial advisors see the path ahead requiring some elbow grease, but they are up for the challenge and optimistic.”
Aite Group asked respondents, many of whom have had many months of preparation, how difficult they think various tasks will be if the regulation proceeds as it stands today.
Most respondents agree as to where pain points exist — and here are three areas where advisors predict challenges.
1. Daily Routines
The greatest difficulties are found in daily routines, according to the survey, with 69% stating that accommodating workflow changes is either somewhat or very difficult.
“No one likes disruptions to routine, as the learning curve can create extra work, take focus away from client contact, or reduce timely actions,” the report states.
Sixty-six percent also believe that ongoing training for the implementation, which continues until Jan. 1, 2018, will be a challenge. Another pain point for 64% of advisors is documentation, which is key, not only on client paperwork and sign-offs but also on notes to validate decisions.
Technology can significantly support documentation; however, the survey finds that implementations of entirely new systems and modifications to existing systems can be difficult, according to 61% of respondents.
“Documentation and technology together go a long way to demonstrating best interest and proper due diligence on client recommendations and actions,” the report states.
2. Financial Advisor Compensation
