The service providers that will ultimately deliver advisors the tools needed to comply with the Department of Labor’s fiduciary rule are asking for more clarification, according to a survey from the SPARK Institute.
The trade group’s survey asked retirement plan service providers about possible changes to their business practices to comply with the new fiduciary regulatory structure.
Responses were mixed; while 14 percent of respondent firms indicated that they would become fiduciaries for the first time under the new regulations, 23 percent said they would continue to be a fiduciary and 30 percent said they planned to continue under a nonfiduciary status.
More than a third, however—34 percent—said they weren’t sure what to do regarding possible major changes in their businesses.
“While about half of the members don’t plan to make major strategic business changes, the other half have already decided to fundamentally change their business model, or are still considering whether to do so,” Tim Rouse, executive director of SPARK, said in a statement. He added, “This level of change will likely take years to play out fully in the market.”
Almost 80 percent said they’re still evaluating the regulations’ risks and requirements; 60 percent indicated that key parts of the regulation are still not clear; 75 percent are looking to their peers, to see how they interpret and address the regulation; and 49 percent are hoping that industry organizations will provide guidance.
Respondents are also thinking beyond simple compliance, according to the survey. Eighty percent say they want to understand how the regulation will change the competitive landscape, and 60 percent want to understand the impact on the advisors with whom they work. In addition, 40 percent are actively looking at new product ideas as a result of the regulation.
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