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DOL Rule Makes Some FAs Reconsider Career (Sept. 26)

By Alex Padalka December 30, 2016

This year, the most popular regulation story highlighted advisors' continuing fears over the upcoming fiduciary rule implementation.

In September, a new report from Fidelity claimed the Department of Labor’s fiduciary rule, which forces retirement brokers to put clients’ interests first, had caused one in five financial advisors to reconsider their careers.

The rule, which goes into effect next year, has caused 18% of advisors to rethink their career choice, while 10% now plan to leave the business or retire earlier than originally planned, according to a survey of 485 advisors conducted in January and 459 advisors conducted in August by Fidelity.

Yet a quarter of respondents in August said the rule will actually help them get new clients and retain existing ones, as well as grow their business — double the number of advisors who had that opinion in January, according to the report.

The rule is also making some firms more aggressive: one in five respondents said their firm is actively looking for acquisitions as a result of the rule, while almost a quarter say their firms will go after retirement assets, Fidelity says.

Most advisors are now preparing for the rule’s implementation: 54% of advisors polled in August have taken measures to adapt to the rule, compared to just 20% in January, prior to the rule’s April release, according to the report.


Half of the respondents are now reviewing accounts to determine the those appropriate for level-fee compensation or the best interest contract exemption, Fidelity says. And about a third of respondents said their firms plan to offer automated advice or are already doing so as a result of the DOL rule, according to the survey.

Advisors are also slightly less concerned about serving smaller clients: while 54% still intend to get rid of smaller clients as a result of the rule, that number is 10% lower than it was in January, Fidelity says.

Wirehouse advisors have been doing the most to adjust to the rule, according to the survey. Other broker-dealers and RIAs have lagged behind. Only half of the survey’s RIA respondents said they’ll re-examine how they handle recommendations for rollovers from 401(k) plans to individual retirement accounts, Fidelity says.

Read our original article, published September 26, here.