Six months before the fiduciary rule is due to go into effect, advisers are split between those who see it as an opportunity and those who are thinking about quitting their day jobs.

Nearly 20% of advisers are reconsidering their careers because of the Department of Labor's regulation, according to a new survey conducted by Fidelity.

Tom Corra, chief operating officer at Fidelity Clearing & Custody Solutions, says it's reasonable to expect that not all those advisers will leave the business. And what may be more encouraging, he says, is the growing number of advisers who see the rule having a positive impact on the business: 29%, up from 12% in January when Fidelity last surveyed advisers on the question.

"The fact that a larger percentage of advisers are seeing this as an opportunity does indicate that there is a path to success on the other side of DoL," Corra says.

The more upbeat outlook may be due to firms stepping up their game plan for implementing the rule; compliance teams across the industry are making headway on turning the abstract into the practical. And the Labor Department has promised to begin issuing FAQs.

About half of advisers say that they or their firm has begun taking steps to prepare for the rule.

Quote
"The fact that a larger percentage of advisers are seeing this as an opportunity does indicate that there is a path to success on the other side of DoL," says Tom Corra, chief operating officer at Fidelity Clearing & Custody Solutions.

Corra says that the firms likely to thrive in a post-fiduciary world are planning for changes beyond compliance: "Who are their target clients? How does the rule affect those clients? How will they make the business process more efficient?"

About three in four wirehouse advisers anticipate their firm will focus more closely on holistic financial planning, according to the survey. By comparison, only 38% of RIAs say the same thing, according to the survey, which polled 459 advisers. Their average AUM was $62.5 million, Fidelity says.

Corra also says that the rule has also become something of a spark to think more broadly about the business.

"I think historically many advisers have focused their practice on ‘I will build a portfolio for you that is suitable for your financial situation,’" Corra says. "There is a need to go beyond that and ask what are the elements that an adviser can deliver andare less replicable by a robo adviser or hybrid adviser."

COMPENSATION WORRIES

And yet a slight majority of advisers – 53% — still see the rule having an overall negative impact, according to the study; 61% of advisers say it will raise the cost of doing business and 47% expect it to hurt their compensation.

Slideshow
Fiduciary no-nos: 10 potential conflicts of interest
From recommending wrong share classes to cherry-picking allocations, these are the pitfalls advisers should avoid.

To help ameliorate the negatives, more third-party venders are stepping into the market with products and services to help advisers and firms prepare for the fiduciary rule.

Earlier this month, fi360 launched an online fiduciary training program. The Pittsburgh-based firm, which says it has been providing fiduciary education since 1999, is also home to the Accredited Investment Fiduciary designation.

(Bloomberg News)
(Bloomberg News)

Fiserv, a financial technology services provider, says its clients are looking for additional help in trading, reporting and other applications.

"Despite our best efforts to remind clients to consider how we can meet their DOL needs we wouldn’t be surprised with a flurry of requests for items they had failed to consider," a Michael Snizek, Product Manager, Investment Services at the firm, said.

Fidelity is also providing support to advisers and firms, from practice management to training. Corra says a big part of complying will be to identify accounts covered by the rule and facilitate workflow and paperwork. He adds that advisers, including RIAs, should not wait to begin planning for the implementation.

"It comes back to not only planning for complying with the rule but asking the tough questions about how does this impact my business strategy, and how does it change the way I have conversations with clients. Having it support a value proposition that is clear and helps clients understand what they are paying you for and the value of that," he says.