Bill Morrissey admits it’s difficult to predict the future when it comes to the Department of Labor’s fiduciary rule, but he also admits he’s feeling confident in the work LPL Financial has done to comply.
“I am confident [in] the vast majority of the work we’ve done to comply with the DOL fiduciary rule, creating better tools, more solutions, better transparency, lowering fees,” Morrissey, head of business development at LPL, told ThinkAdvisor during the LPL Focus conference, held earlier this week in Boston.
“Whether the fiduciary rule is enforced on January 1, or it gets pushed back again, or it’s eliminated and another rule comes in its place — we’re going to go forward with the majority of these tools and these capabilities because they’re in the best interest of our clients,” he explained.
During the firm’s earnings call with equity analysts last week, CEO and President Dan Arnold alluded that there has recently been “some reduction in that level of uncertainty” tied to regulatory issues such as the new Department of Labor fiduciary rule — a view that Morrissey told ThinkAdvisor he agrees with.
A year ago, Morrissey said, the whole industry was “focused like a laser” on the DOL fiduciary rule.
“It galvanized the entire industry,” he said. “There was lots of disruption in the space because firms were wrestling with how to comply with it. Advisors were concerned … whether or not their firms could comply with it. And so that created a lot of energy around how to comply with the DOL rule.”
When the election cycle shifted later in the fall of last year, there was a lot of speculation that the Trump administration was going to eliminate the Labor rule. This caused a lot of that energy and sense of urgency around the rule to dissipate in the first quarter, according to Morrissey.
Now, though, Morrissey said he’s starting to see that energy pick up.
“When we get calls from other firms [and] advisors from other firms, their concern about whether or not they can comply with the DOL fiduciary, the urgency of getting either to a firm that is in compliance or helping their current firm get into a place that will comply with it — that urgency is increasing,” he said. “Because as of right now there’s a Jan. 1 enforcement date.”
Morrissey feels like LPL is an a good place, and he told ThinkAdvisor why.
“As an independent firm, to comply with the DOL fiduciary rule, you need three things: You need to believe in choice, you need to have scale, and you need to be fully self-clearing,” he said.