Consistent speculation that the Trump administration will delay the April 10implementation date for the Labor Department’s fiduciary rule may be encouragingrecord-keepers to pause compliance outreach to defined contributionadvisor specialists.

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New data from Cogent Reports, a division of Market StrategiesInternational, shows about half of defined contribution advisorspecialists don’t feel they are getting adequate compliance supportfrom record-keepers.

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“It’s clear that advisors are looking for support from serviceproviders,” said Sonia Sharigian, senior product manager ofsyndicated research at Cogent and author of two studies thatexplore the fiduciary rule’s impacts on DC advisors andparticipants.

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Related: Changes coming to 401(k) callcenters

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Despite the desire for support, Sharigian says a recent surveyshows it’s lacking among all advisor specialist channels. Among RIAspecialist advisors, only 41 percent said record-keepers have shownwillingness to partner and support business modificationrequirements under the rule.

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Fiduciary rule holding pattern

With less than 10 weeks to the first scheduled implementationdate, Sharigian is confident that record-keepers have developedcompliance and outreach efforts. But talk of the rule’s delay, andpotential rewriting, has forced at least some of the industry intoa holding pattern.

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“Everyone is in a wait and see approach right now,” saidSharigian. “It could very well be that record-keepers have outreachplans in place but they are waiting for greater clarity on the fateof the rule.”

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Facilitating plan specialists’ compliance and education effortsunder the rule could create a new competitive lever forrecord-keepers, which view plan specialists as vital marketingconduits in the increasingly competitive retirement plan space.

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“Advisor specialists already have a limited set ofconsiderations for how they choose record-keepers,” notedSharigian.

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But extending outreach efforts when the consensus of industryanalysts is predicting a delay, at the very least, of the rule maynot be a wise utilization of resources, suggested Sharigian.Rather, initiating a coordinated outreach may be more practicalwhen industry is not distracted by persistent speculation of therule’s fate, she said.

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RIA specialists’ impressions widely different frombrokers’

Overall, RIA plan specialist advisors, who serve in a fiduciarycapacity, are more comfortable with the rule relative to advisorsin the broker-dealer and bank channels.

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Only 29 percent of RIA advisors strongly support repeal of therule, compared to 69 percent of advisors affiliated withindependent broker-dealers and 82 percent of advisors affiliatedwith the banking channel.

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Related: DOL issues fiduciary rule guidance foradvisors

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And only 6 percent of RIA specialists say the rule will limitinvestment product selection, compared to 44 percent of advisorsaffiliated with a regional broker-dealer. One in 10 RIA advisorsfeel the rule has tarnished the financial service industry’sreputation, compared to about four in 10 of broker-dealeraffiliated advisors that think so.

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Sharigian suggested the fact record-keeper outreach has not beeninitiated in earnest by some record-keepers means advisors may notyet be completely clear on how the rule would impact key businessdecisions, such as which investments to recommend. An increasedflow to lower-cost passively managed mutual funds is expected ifthe rule is implemented as it is written.

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Related: Read more about the fiduciaryrule

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