Record keepers are undergoing extensive audits of their business practices, said Hayes, and the result, at least for the time being, is that the momentum for delivering personalized retirement strategies for participants has clearly dropped.

Every aspect of a record keeper’s services has to be reevaluated as a result of the rule, she said.

Specifically, record keepers are evaluating what aspects of their services could be construed as investment recommendations under the rule, which says that any investment advice given in exchange for compensation will rise to a fiduciary act.

Related: Peruse all our DOL fiduciary rule coverage

The rule’s vagaries are complicating record keepers’ analysis, says Hayes.

“Most attorneys are saying that what constitutes a recommendation under the rule is subject to a lot of debate,” she said. “Firms’ attorneys are interpreting this in different ways—some more conservatively than others. There’s a lot of variability across the industry in terms of defining what a recommendation is.”

That degree of interpretability is causing attorneys to put service providers and asset managers on notice.

“It’s anticipated by almost everyone that litigation will rise under the rule,” said Hayes.

Even before the rule’s finalization, industry had largely trained itself to avoid using the word “recommendation” in communications to participants and in the support offered via call centers and through one-on-one advisor engagements.

Instead, service providers have designed services to offer participants “considerations.”

But language in the rule’s education carve-out leaves room for debate over whether giving participants options to consider will rise to the level of an investment recommendation.

“The difference is subtle,” said Hayes, who underscored that it is not yet clear if an offered consideration will be regarded as a recommendation under the rule. Ultimately, the case law expected to emerge under the rule will go some way to defining the difference.

The ultimate question record keepers are struggling with is how the rule changes the definition of education.

Related: Advice vs. education: 4 things plan sponsors must monitor under the fiduciary rule

“The more personalized the messaging is, the more likely it is determined to be recommendation,” said Hayes, who underscored that it is still unclear how the rule will ultimately affect movement of personalized advice to 401(k) participants.

Any suggestion on a best course of action, or saying a strategy is valuable, could be interrupted as a recommendation by participants, she said.

Current best practices up in the air

Broadridge, which provides investor communication services to 21 of the top 25 defined contribution record keepers and services 55 million retirement accounts, identified 10 best practices for plan design and enhanced participant experiences that emerged before the DOL finalized its fiduciary rule.

Broadridge then surveyed industry stakeholders as to how the rule will impact each of those best practices.

Four of those practices—best next-step messaging, multi-channel communications, life event content, and peer benchmarks—are expected to be negatively impacted by the rule, according to stakeholders surveyed by Broadridge.

The fates of another four best practices—automatic enrollment programs, income projections, interactive calculators, and wellness programs—are considered uncertain by the stakeholders surveyed by Broadridge.

Two best practices—analytics on plan performance for sponsors and engagement tracking—are expected to be encouraged by the rule, as service providers use the features to help sponsors fulfill their fiduciary duty to monitor service providers.

“These regulations hit at the heart of participant experience design programs, particularly mature ones,” said Cindy Volker, senior director of product management at Broadridge.

“Momentum for these programs has clearly dropped while we all pause to ask the question, ‘is this a recommendation’,” she said. “We expect to continue to see a pause while we all recalibrate and figure out how each program aligns and fits under the new regulations. Nearly every customer touch point will require evaluation.”

Are you a fiduciary?

Record keepers will have to decide as to whether or not they intend to act as fiduciaries, and tailor their services accordingly, said Hayes.

The inevitable emergence of new class-action litigation brought under the rule is already forcing service providers to prepare for how to defend against allegations.

Hayes said she is hearing across the board that service providers are developing a two-pronged approach to protecting and defending against inevitable claims, including a “process documentation defense” and an “archive retrieval defense,” where service providers produce specific communications given to specific participants at specific times.

The rule has also raised sponsors’ awareness of their role as fiduciaries, and their requirement to monitor service providers—an awareness that Hayes only expects to escalate once the rule is implemented.

Prior to the rule, industry had made efforts to get sponsors out of the habit of reviewing every delivered piece of communication, given the increases in volume of communications in the digital age.

Under the rule, service providers will be encouraged to create new tools that give sponsors confidence they are adequately monitoring their service providers.

“We believe there is a huge opportunity for providers to create some level of standard product offering in this area,” said Hayes. “But if we don’t get ahead of it we also think this could be a potential black hole of investment for a number of providers.”