A new paper exploring where financial advisory firms will have to spend money after tomorrow’s release of the Department of Labor’s fiduciary rule says ERISA-qualified accounts represent about 50 percent of a typical wealth management firm’s asset base.
That translates to a considerable amount of potentially impacted revenue for advisor firms, according to research of broker-dealers and RIAs from Beacon Strategies, a Denver-based consultancy to the financial services industry.
Going forward, offering fee-based advice will be the best way for advisors to demonstrate their adherence to the rule’s Best Interest Contract Exemption, which imposes costly disclosure requirement on commission-based sales and potential civil and class action costs for failure to comply.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
