The Fiduciary Rule and Its Impact on the Wealth Management Industry The Fiduciary Rule and Its Impact on the Wealth Management Industry

On April 4th, 2017, the Department of Labor released a final rule delaying the implementation of its fiduciary duty regulation to June 9th. This delay represents a near term reprieve for broker dealers; especially IBDs who had the most to lose (almost ~20% of their revenue base). This delay is also a chance for companies to pause, ease off on the activity and money being spent on compliance, and look at their business with a focus on sustainable long term growth.

Regardless of what happens next, the fiduciary ‘genie’ is out of the bottle as some firms already declared they will stick with their actions even if the rule is repealed and make fiduciary responsibility a major part of their value proposition – customers’ increasing demand on price transparency will only accelerate this shift. Wealth management executives must make a choice in this Fiduciary Dilemma scenario – planning and preparing for the implementation gives companies the strategic option of using the fiduciary standard as a lever for competitive reasons, and not just for compliance.

Read more about the DOL Fiduciary Rule, including the actions that some financial institutions have taken. Download the 2017 Update on the DOL Fiduciary Rule report.

Our research shows just how large an impact it will have on the industry: as much as $20 billion in lost revenues (roughly 7 percent of the industry total) and up to $2 trillion in shifted assets across different players in the industry.

Industry players must take quick action to minimize the disruption to their businesses and more importantly to position themselves for longer-term success and growth. For many industry players, we see this as an opportunity to seize the competitive advantage by challenging existing business models and by accelerating the ongoing industrywide efforts to create market-winning value propositions for customers.

Our comprehensive study outlines several key aspects of the fiduciary rule:

  • A perspective on the relative winners and losers when the rule goes into effect
  • A detailed view of the asset flows and projected revenue impact by player and distribution format
  • Recommendations on actions companies can take to comply with the rule and reposition themselves in the marketplace

Key Insights Key Insights

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