Both broker-dealer reps and RIAs believe the Department of Labor’s pending fiduciary rulewill have a negative impact on their businesses, according to asurvey by Fidelity Institutional.

Tom Corra, COO of Fidelity Clearing & Custody, said in aninterview last Friday that advisors see the DOL fiduciary rule as“more dramatic than any other regulation over the past fiveyears.”

Read: 5 things to know about the DOL fiduciaryrule

In addition to the extra cost and time involved in complyingwith the rule, advisors expect a shift in the products theyrecommend to clients: 28 percent of advisors surveyed say they willrecommend variable annuities less often, since “maybe 96percent of VAs are sold with a commission today,” Corra said, while43 percent said they will recommend managed accounts moreoften.

Read: IRI holds out hope DOL won't ban commissions,proprietary products

In addition to the products they will use, three-quarters of therespondents said the rule will force them to re-evaluate the typesof clients they serve, while 62 percent said they expect to “let goof or transition” some of their smaller clients from theirpractices.

The online, blind survey (Fidelity was not divulged as thesponsor) was conducted in January among 485 advisors from theinsurance, bank, wirehouse, independent broker-dealer and RIAchannels.

Read: DOL fiduciary rule to turn plan advisors intofiduciaries 'overnight'

It found that 80 percent of those surveyed were aware of therule, that 73 percent believed it would have a negative impact ontheir practice and that overall they expected fewer investors,especially smaller ones, would receive retirement advice.

RIAs see the rule as a business challenge, too: 50 percent ofthose surveyed said they expected to spend more time on complyingwith the rule and that their overall cost of doing business wouldincrease.

Corra said the findings and Fidelity’s own experience servingits advisor clients shows that “this is a topic where advisors arelooking for more information.”

However, 53 percent of those surveyed said they were waiting “totake any action” on responding to the rule, so Corra says “there’san opportunity now for advisors to familiarize themselves on therule and how to adapt” their business models.

“At a minimum,” Corra said, advisors should expect to have “aconversation with clients” and increased recordkeeping costs.

Read: Annuity innovation continues as industrybraces for DOL fiduciary rule

While it’s possible, he said, that DOL “may delay implementationfor some of the more onerous requirements” of the rule, advisorsnow should “find out how much of my business is in ERISA plans” andhow much of their revenue “comes from commissions.”

Regardless of size or business model, Corra suggests that firmswith a “planful approach” will be more successful in adapting tothe rule, and he urged advisors to view the rule “through the lensof your clients and from your own business lens. Understand whatyour competitive advantage is and articulate that to clients,especially if you’re changing your compensation model.”

Corra brought up another topic of interest to advisors whoreceive commissions and trails. “The initial [DOL] proposalprovided very little in the way of carve-outs for grandfatheringcurrent clients,” he said, and related how in a recent Fidelitywebinar for advisors “a number of the questions had to do with ‘CanI continue to get trails on annuities, or on 12b-1 fees?’”

He also pointed out that the proposed rule’s BICE — the bestinterest contract exemption — “is a legally enforceable contract,”which means advisors could be liable to lawsuits byclients.

In one of several white papers that Fidelity has published tohelp advisors plan for the rule — Six Ways to Help Prepare forthe Proposed DOL Investment Advice Rule and CapturingOpportunities Created by the Proposed DOL Investment AdviceRule — Corra pointed out a section on a lifeblood of advisoryfirms: referrals. “If you’re referring clients to somebody else,then you are a fiduciary” by extension, Corra argued.