IT Budgets Expected to Increase to Comply with Fiduciary Rule

Eighty-five percent of investment professionals expect budgets to increase.


The overwhelming majority of investment professionals (85%) expect their firm will increase its technology budget to comply with the Department of Labor’s (DOL) new fiduciary rule

This was the finding of a survey of 120 investment professionals conducted by SS&C Technologies Holdings, Inc. According to the firm, 33% of advisers expect their firm will allocate 10% to 25% of its budget for this purpose, and another 41% expect the rule will bring about “substantial changes” at their firms.

Asked what specific types of technology their firms might use to respond, 18% said client portals, 14% said fee disclaimer support, 14% said portfolio management and reporting, and 13% said financial planning. As to whether the new fiduciary rule will impact their firms’ client rosters, 62% said yes. Among the registered investment advisers (RIAs), 58% said yes, and among independent broker/dealers, 53% said yes.

Asked about other challenges on their minds, 22% said “determining whether their client service model is the right fit,” 19% said “whether they are attracting the right adviser talent to meet growth goals,” 17% said “DOL rules and regulations,” and 12% said integrating a robo-adviser platform in their business.

“While the industry is still digesting exactly how to adapt their businesses due to the DOL rule, it’s undeniable that firms will need to evolve their advice models and their daily operations,” says Dave Welling, managing director and co-general manager of SS&C Advent. “We are actively engaged with our clients on the challenges and opportunities ahead and how investment in technology can help them grow, scale and run their businesses more efficiently.”