Investment professionals expect that their firms’ budgets will be increased to accommodate technology that will help them comply with the U.S. Department of Labor’s fiduciary rule.

That’s according to a survey conducted by Windsor, Connecticut-based SS&C Technologies Holdings Inc., which found that not only are 85 percent of financial professionals expecting those higher budgets, they feel that the amount spent on compliance will be substantial: a third of respondents (33 percent) estimate that their firms will allocate 10–25 percent of their budgets for this purpose.

Asked about specific technologies necessary to buy or to enhance to achieve compliance with the rule, 18 percent of investment professionals put client portal/document management capabilities at the top of their lists. This was followed by billing, fee scheduling and disclaimer support (14 percent), portfolio management and reporting (14 percent) and financial planning (13 percent).

The survey also sought to learn which business growth challenges were keeping investment professionals up at night.

More than a quarter — 28 percent — of survey respondents chose the answer, “operational efficiency isn’t where it needs to be to reach our business goals.”

According to the survey, 80 percent of investment professionals expect the Labor Department rule to specifically impact policies, procedures and technology systems at their firms, and 41 percent of respondents expect “substantial changes” when determining the impact on their firms.

Then there are the potential effects on client rosters from achieving Labor Department rule compliance.

More than half (62 percent) of investment professionals believe compliance will change the makeup of their client base; 58 percent of the registered investment advisors polled say the impact will be minor on the types of clients they currently serve, while 53 percent of independent broker-dealers replied that way.

Other “up-at-night” worries cited by survey respondents included whether or not their current service model is still a fit for today’s more demanding clients (22 percent) and attracting the right advisor talent to meet growth goals (19 percent), while 17 percent said the Labor Department rule and regulations are hurting their business and 12 percent were worried about how to operate a robo-platform within their business.

Instant Insights /

Tech budgets likely to rise to comply with DOL fiduciary rule

More From HR Executive

Related Stories

Recommended For You