Advisers Delay Acting on SEC’s Best Interest Proposals

Forty percent are waiting for further clarification, Fidelity learned in a survey.

Reported by Lee Barney

Seventy-three percent of advisers are aware of the Security and Exchange Commission’s (SEC’s) best interest proposals, Fidelity Investments learned in a survey. However, in 2016, 85% were aware of the Department of Labor’s fiduciary rule.

Among the advisers aware of the best interest proposals, 40% are holding off on taking action until the SEC issues further clarification. Seventy-eight percent of advisers say they need some help evaluating the proposals.

Advisers are exactly evenly split on their opinions about the impact the best interest proposals will have on their business, with 33% saying it will be positive and 33% saying it will be negative.

Sixty-two percent of advisers believe the SEC will succeed in putting the best interest proposals in place. To comply, advisers are planning to use tools and technology, recommend investment products based on standard of care, use custom forms to demonstrate standard of care, and to use account identifiers to indicate standard of care for investor accounts.

Fidelity says that key takeaways for advisory practices are that the industry is evolving and advisers need to consider where they fit in this landscape. The SEC’s proposals are quite ambiguous, so advisers need to stay on top of developments and clarification, and they need to consider how they can use technology to comply with the new rules.

Tags
best interest proposals, Department of Labor, DoL, fiduciary rule, SEC, Securities and Exchange Commission,
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