Just 42 percent of advisors say they are aware of their firms’ timeline for implementation or what training or support the firm will provide, while only a third (33 percent) are aware of their firm’s new compliance procedures.
That’s according to a Nationwide Retirement Institute survey that found that most advisors — 87 percent, in fact — are considering changes to their business model as they wait to learn what their firms will require in terms of compliance with the U.S. Department of Labor’s new fiduciary rule.
While advisors provided varied perspectives regarding how they plan to change their mix of products sold, the survey found that 43 percent may plan to expand services offered to more holistic planning and 26 percent may plan to focus on nonqualified accounts.
The Best Interest Contract Exemption (BICE) continues to be an area of great concern for firms and advisors. Only 23 percent of advisors are aware of their firms’ plans with respect to adoption of the BICE to sell variable compensation products. At the same time, 78 percent identified the BICE as one of the greatest areas of impact to their business.
While there’s been considerable outcry over both the fiduciary rule and the BICE within the industry, not all feel that it will be bad —at least in the long run. Consultant Cerulli said back in March that the rule will bring about “unexpected changes to the retirement and wealth management industries, and, to a degree, this cultural evolution is what the proposed rule is hoping to effect.”
Advisors are “eager,” according to Nationwide, for information about the new rule. Still, respondents considered themselves knowledgeable about its various aspects, with 82 percent characterizing themselves knowledgeable about fiduciary requirements; 76 percent, about products subject to fiduciary standards; 76 percent, about fee/compensation disclosure requirements; 73 percent, about BICE; 69 percent, about what is considered advice vs. education; 64 percent, about grandfathering provisions/conditions; and 64 percent, about levelized compensation requirements.
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