The vast majority (87%) of U.S. financial advisors are contemplating changes to their business model in response to the forthcoming fiduciary rule from the U.S. Department of Labor (DOL), which takes effect next year, according to a new survey from the Columbus, Ohio-based Nationwide Retirement Institute.
The survey of 622 advisors found that advisors are considering a variety of changes to how they do business, with 43% planning to expand their services to a more holistic planning approach.
“The survey insights show that advisors are considering a shift from a transaction-based business model to more of a service-oriented model,” says Kevin McGarry, director of the Nationwide Retirement Institute, in a statement. “Firms are taking this seriously, but still have a lot to work through. As we move through the next 18 months, we anticipate shifts in product mix and levels of understanding and concern.”
The survey also indicates that advisors are waiting for direction from their firms on how compliance will change in response to the new rule. It reports that only 33% of advisors are aware of new compliance procedures at their firm; and 42% said they are aware of their firm’s timeline for implementing new procedures, or the training or support the firm will provide.
“These data affirm what we’re seeing across the country,” McGarry says. “Firms are busy working through the new rule, figuring out what it means for their specific situation and developing their game plan to implement by next spring.”
The survey was administered online by a third-party research firm in May, with advisors who represent a mix of distribution channels, tenure and production.
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