Advisors and independent broker-dealers are evenly split on how the Department of Labor's rule to amend the definition of fiduciary on retirement accounts will impact their day-to-day business functions, with half saying that the new rule will make their jobs harder and half saying nothing will change, according to a poll conducted by ThinkAdvisor.
The online poll conducted in April garnered 156 responses — 46% of respondents were RIAs, 30% indie BDs, 20% hybrid advisors and the remaining hailed from wirehouses.
The 10-question poll queried advisors on such topics as which products they believe will be affected by DOL's rule, whether DOL should be sued over the rule, and whether they'd be changing their compensation structures.
During a recent webcast conducted by ThinkAdvisor, Allison Wielobob, counsel with Sutherland, Asbill & Brennan, who advises clients on a range of fiduciary issues under Title I of ERISA, argued that in its final rule, DOL "made an effort" to be responsive to at least some of the negative commentary about earlier drafts.
"We got more detail on the types of information that will be treated as fiduciary in nature, although there are meaningful ambiguities" in the rule, Wielobob said. "Elements of the proposals that were in conflict with other bodies of law were eliminated and the operational requirements of the Best Interest Contract Exemption were improved in ways that make it a more viable compliance alternative."
She told ThinkAdvisor webcast attendees that DOL made "modest" improvements in the final rule to the brokerage industry's criticism that the proposed rule's education exception of fiduciary advice was too narrow. "We got more specificity [in the final rule] on what is considered to be 'general communication' and not fiduciary advice."
The final rule "now provides that 'general communication', which is not advice, should be something that a 'reasonable person' should not view as an investment recommendation," Weilobob said. "Anybody that has looked at any ERISA matter knows that there's a lot of deference to the 'reasonable person' standard, and that applies here as well."