One of the most widely debated issues around the Department of Labor’s fiduciary rule is whether, as many broker-dealers claim, the new rules will limit the ability of financial advisors to serve “small” investors or reduce access to advice and products. A recent survey of 777 financial advisors from FiduciaryPath, though, finds all the hand-wringing about consumer access may be for naught. For instance, the survey results found that when advisors are asked directly whether it costs consumers more to work with a fiduciary advisor than a broker once all-in financial advisor costs are considered, a whopping 73% say “no”, fiduciary advice is not more expensive, and 57% state that a fiduciary duty for brokers would not reduce product and service availability. In fact, 80% of financial professionals indicated that they expect their Assets Under Advisement to stay the same or increase under the new fiduciary rule. Notably, though, the results did indicate that commission-only advisors (understandably) have more concerns, with only 48% expecting their assets under advisement to increase or stay the same, although advisors engaged in a blend of fees and commissions remain optimistic (at 78% anticipating no decline in AUA after the fiduciary rule takes effect). And of course, the reality is that brokers who operate on a commission-only basis are technically not in the business of advice in the first place (as their advice must remain solely incidental to their brokerage services to avoid the requirements to register as an RIA!). Nonetheless, the bottom line was that in the end, a mere 3% of financial advisors of any compensation type actually agreed to the statement that they will stop providing advice on qualified retirement accounts in a fiduciary world.
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