E-signature provider SIGNiX published a new analysis suggesting retirement plan services providers will face potentially tremendous new amounts of paperwork and disclosure under the Department of Labor (DOL) fiduciary rule taking effect next year.
If not tackled the right way, the seemingly trivial cost of managing new paperwork and data processing related to the fiduciary rule could quickly grow out of hand, the firm warns. Some of the burden may be eased by the fact that the DOL has allowed for certain amounts of bulk digital disclosures under the stricter fiduciary paradigm—but even the digital disclosures come along with strict requirements that will mandate careful monitoring, according to SIGNiX.
Citing research from the right-leaning think tank, The American Action Forum, the firm suggests the retirement industry as a whole could face up to 57,000 hours of processing time to comply with the new rule. Much of the work will come from papering new contracts with individual retirement account (IRA) customers, SIGNiX predicts. Significant time will also go into processing Best-Interest Contract Exemption (BICE) forms and disclosure agreements.
According to the firm’s analysis, which also cites survey data from Red Rock Strategic Partners, a strong majority (73%) of defined contribution industry executives believe the DOL fiduciary rule will be either “very” or “extremely disruptive.” With all this in mind, SIGNiX urges advisers to proactively scope out the amount of paperwork that could potentially arise under the rule—and to plan to use as much digital processing as possible. Doing so can save end-clients potentially thousands of dollars during the effort to comply with the new fiduciary rule.
“What forms and disclosures will you need to get signed? Who offers true digital signature technology? Is their technology based on international, published standards?” the firm asks. Other questions to consider: “How often will new forms need to be updated? How many clients will need to sign off on new paperwork?”
Additional information is available at www.signix.com.