Survey: Advisors Fear Consequences of DOL Fiduciary Rule

"The DOL fiduciary ruling is fueling investors' focus on fees," the report states. "Investors, largely influenced by the news media, are articulating the impact of the ruling more in terms of fees rather than the more abstract concept of 'responsibility.'"

"In turn, advisors believe DOL is forcing them into a fee-based compensation structure and limiting their product selection," the report adds. "Despite acknowledging that this was not the stated intention of the rule, advisors generally agree that the ensuing restrictions and conversation taking place through the media have demonized the practice of charging commissions."

Among the report's additional findings:

• Advisors are fiercely divided on fee structure implications. While those advisors who are already fee-based see the DOL action as formalizing an inevitable market shift, many commission-based advisors are fearful that commoditizing their service puts them at greater risk of being undercut by cheaper automated advice services.

• Advisors' personal liability concerns are skyrocketing due to the increased volume and scope of internal and external regulations.

• There's a marked increase in internal scrutiny and compliance. Advisors report feeling monitored rather than supported by their firms. In addition, the burden of compliance and required documentation is taking a toll on advisors' ability to work efficiently, compounded by the need to document all aspects of their advisory consultations.

• The digital world is exacerbating negative accountability while opportunities for positive advocacy remain restricted. Advisors believe that online platforms such as "broker check" are opening the door to largely unchallengeable negative reviews while avenues for positive endorsement via sites such as LinkedIn remain off-limits.

— Related on ThinkAdvisor:

• Law Firms Risked It All on 401(k) Fee Suits, and It's Paying Off
• A DOL Fiduciary Rule Compliance Checklist
• DOL Rule: Is That All There Is?