As advisors head into the new year, they’re worried most about two direct implications of the Department of Labor’s fiduciary rule: compliance and fee compression, according to a new survey by SEI.
A mere 11 percent of advisors say they feel ready for the implementation of the new regulation, which takes effect in four months. Forty-one percent of the 275 advisors surveyed indicated they feel almost ready.
Technology investment was also a top concern for advisors, with more than 55 planning to increase technology spending in 2017. Moreover, the outsourcing of non-client-facing activities will be a growing trend; 30 percent of respondents said legal and compliance is an area they may outsource.
“These survey results demonstrate that the rule is impacting advisors’ considerations in several aspects of their business when looking at 2017, which is one reason we are seeing advisors re-evaluate their infrastructure, increase attention to client-facing activities and focus on the outsourcing of non-client-facing activities,” said Wayne Withrow, executive vice president of SEI and head of the SEI Advisor Network.
He added, “Even with the level of unpreparedness felt by financial advisors, the survey results imply that they are considering the necessary steps to plan, execute and comply by converting to a fee-based model to get in front of the rule with clients top of mind.”
