Here’s something you don’t hear much about: How will the new DOL fiduciary rule impact some recordkeeper business models?

Over the years, registered investment advisors have questioned whether some recordkeepers may have crossed the line by offering “generic” investment advice to 401(k) participants.

They claim this, in fact, has morphed into actual investment advice.

To date, recordkeepers have managed to fall outside the definition of investment fiduciary.

It’s possible--and some would say very likely--the new DOL fiduciary rule will make it harder for recordkeepers to avoid being classified as fiduciaries (see “Will New DOL Rule Contain Fiduciary Surprise for 401k Recordkeepers?” FiduciaryNews.com, November 10, 2015).

If recordkeepers are suddenly thrust into the investment advice regulatory regime, how will they respond?

Unlike brokers, whose business model has become the focus of much of the discussion dealing with the potential impact of the DOL rule, recordkeepers in general do not currently have compliance infrastructure to address investment adviseor compliance.

Because of this, a number of people familiar with the recordkeeping industry feel recordkeepers might simply stop offering investment advice.

Who benefits from this?

Clearly, advisors who can offer investment advice within the fiduciary framework are best positioned to step in and fill the void.

Or maybe not.

It gets right down (again) to who will pay for this (and how).

It is very difficult for the plan level advisor to also provide individual advice to plan participants.

In the past, this was done as part of the plan level service, meaning the entire plan paid for “casual” individual advice. Today, that same service is limited to “generic” investment education.

The transition towards this has confused and frustrated employees. It has also allowed recordkeepers to come in and fill the void.

And this has bothered many legitimate investment advisors.

The new DOL fiduciary rule is likely to close this loophole, and it’s natural to think this will open the door to those same advisers.

But it might not, unless those investment advisors can garner fees that will allow them to maintain a sustainable business model.

This may be possible, as several well publicized advisor firms have said they are doing this already.

Can these firms handle the potential increase in capacity? Will plan sponsors be aware of these service providers?

If not, the DOL is trumpeting robo-advisors as a potential solution. Of course, like the generally accepted panacea of target-date funds, robo-advisors are fraught with their own issues.

It’s possible plan sponsors will be initially attracted to robo-advisors, but it’s equally possible they’ll become disenchanted by the inability for machines to engage in human conversations.

There are a lot of issues that go into making financial decisions. These go well beyond analyzing investments. In fact, most of them deal with saving, budgeting, and cash flow decision-making.

So, there may be a third way. It may be employees really don’t need investment advice, they want financial coaching. That’s best delivered by a human.

And that human doesn’t have to fall under the realm of the DOL fiduciary rule.

Now that’s an opportunity no one seems to be thinking about.