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DOL Fiduciary News: December 13, 2016

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Fitch: DOL Fiduciary Rule Effects on Wealth Managers Will Vary

December 12, 2016 12:39 PM EST

NEW YORK & CHICAGO--(BUSINESS WIRE)--Wealth managers will see differing costs and benefits from the introduction of the Department of Labor's (DOL) "fiduciary rule" as they roll out varying strategies in response to the new regulation, says Fitch Ratings.

The new DOL rule pertaining to conflicts of interest in retirement advice is due to begin to come into effect in April 2017 and will require wealth managers to maintain a fiduciary standard for clients' retirement accounts. This means that wealth managers who manage discretionary retirement accounts will be legally held to higher fiduciary standards and required to make full disclosures regarding conflicts of interest and fees.

Broker/Dealer Evolution Ahead of Fiduciary Rule

PLANADVISER; December 12, 2016

A new analysis from Cerulli Associates warns the Department of Labor's (DOL) Conflict of Interest Rule, should it still go into effect after the Republicans’ sweep of the Presidency and Congress, “will have an enormous impact on the asset management and adviser industries by enforcing heightened fiduciary standards and increasing the cost of doing business.”

Cerulli further suggests that boutique broker/dealers (B/Ds) are one of the segments that will be most impacted under the DOL rule. Sizing this portion of the market, Cerulli observes that B/Ds with fewer than $10 billion in assets account for more than 80% of overall B/D firm volume, but less than 10% of adviser-managed assets.

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