CHAPEL HILL, N.C..–The investment services industry is feeling confident about being ready to comply with the Department of Labor's Fiduciary Standard: 65% of bank and credit union investment services executives and 73% of executives at product partner firms say they are on track to be ready by the April 10th deadline.
The findings were released as part of the just-conducted Kehrer Bielan Survey of DoL Readiness.
"Only 3% of respondents from financial institutions believe that the Rule will be repealed,” said Tim Kehrer, the firm's senior research analyst “Interestingly, 27% of product partner respondents think the new administration will scrap the rule. So it is not surprising that nearly all bank and credit union investment services executives say they are continuing to prepare for April implementation: 95% of bank and credit union firms are planning for the rule to go into effect as scheduled, and only 5% have slowed down their preparations. By contrast, 18% of product partner respondents say their firms have pulled back, and another 9% have halted preparations entirely."
According to Kehrer Bielan, the bank and credit union respondents were evenly split between thinking the rule would be delayed (28%), modified (34%), or left unchanged (34%). On the other hand, only 9% of the product partner respondents thought that the rule would stand as is.
Kehrer said that the industry is almost certainly headed towards an adjustment in advisor compensation. "Forty-eight percent of bank and credit union executives say they are going to change advisor comp plans to remove conflicts, regardless of what happens with the DoL rule."
Fewer bank and credit union investment services firms will adopt some of the other facets of the DoL rule if it is repealed: 29% would still adopt a best interest standard, and only 5% would eliminate commission products, according to the Kehrer Bielan study.
The findings are based on survey of 77 bank, credit union, third-party broker dealer, and product partner executives.