Other services within the WFM unit of Wilshire, which include asset allocation and managed account programs designed to bolster the fiduciary bona fides of other financial intermediaries, now account for more than $100 billion in advisory assets, much of that managed on a discretionary basis. Together, the nearly $160 billion under the WFM umbrella constitute the fastest growing segment of Wilshire’s overall business.

Recently, Ameriprise Financial hired WFM to assume a discretionary fiduciary advisory role over the dually registered firm’s model portfolio program. Previously, WFM provided non-discretionary consulting on Ameriprise’s fund rosters. Schwarz noted that WFM has been serving financial intermediaries in both discretionary and non-discretionary roles for the past decade, but it is the former capacity he expects to see more commonly utilized going forward, no matter what revisions are made under Labor’s Presidentially-ordered review of the rule.

“The genie is clearly out of the bottle,” said Schwarz. “Wilshire’s view on the rule is that some changes are inevitable. We don’t have a dog in the fight as it relates to what becomes of the best interest contract exemption, or the rule’s private right of action, nor do we claim to have a crystal ball. But we do expect industry to move in the direction of conflict-free advice.”

Over the course of the next six months—Labor has indicated that it will complete its review of the rule before January 1, 2018, when the rule’s BIC Exemption is scheduled to take affect—Schwarz says it is certainly “plausible” that some compromise with opponents of the rule can be struck.

Proponents of the status quo can be expected to lobby to water the rule down to a new series of disclosure requirements. “I don’t see that as something that will ultimately win the day, though that has long been the desire on behalf of industry,” said Schwarz.

As for the time being, Schwarz says industry has by and large done a good job complying with the impartial conduct standards, which requires advisors to serve IRA investors’ and most 401(k) participants’ best interests.

“The DOL has been clear. They are allowing a range of approaches to comply with the impartial conduct standards. That is key—financial institutions have some flexibility in how they safeguard compliance with the standards,” he said.

Notwithstanding imminent changes to the rule, Schwarz thinks it will be “impossible” to walk back the impartial conduct standards.

“There’s no looking back after June 9,” said Schwarz. “The struggle to comply will be more pronounced on the smaller end of the market, but larger firms are embracing this, reluctantly or not.”