Wirehouse and regional B-D executives are expressing confidence in the amended fiduciary rule, but some advisors are questioning the wisdom behind the new regulations.
Executives and compliance experts are still parsing the amended rule's hundreds of pages. But based on his initial review, Merrill Lynch's John Thiel was pleased the new regulation addresses several "practical concerns" made during the comment period.
Thiel also reiterated his firm's support for "a consistent, higher standard for all professionals who advise the American people on their investments."
His comments were picked up later on Wednesday by Secretary of Labor Tom Perez, who cited them at an event unveiling details of the rule.
But some advisors remained skeptical that the rule would upset business relationships.
"I think it's a pain in the neck. A thorn in one's side. I'm shocked it got approved," says an advisor with Morgan Stanley, who asked not to be named because he did not have the firm's permission to speak publically.
"If your client wants to buy a stock and believes it's going to go higher, it's nice to have IRA money to do that, purely on a transactional basis," says the advisor, whose business is only 1%-2% transactional.
"Isn't it foolish?" he asks. "It seems they want to strip that away."
Branch managers and other executives set out to address similar concerns voiced by advisors.
One manager at a large regional brokerage, who asked not to be named because he also was speaking without permission from his firm, said some of his brokers were "dinosaurs" because they were strongly committed to a commission-based model.
However, some industry watchers disagreed with the characterization that brokers holding on to commissions were behind the times. Recruiter Danny Sarch says many advisors still work on commissions in the best interest of their clients.
"The idea that every client is the victim of the preying, shrewd broker is an awful stereotype. It makes me nauseous," recruiter Sarch, president of Leitner Sarch Consultants, says.
Raymond James Complex Manager Tom Hirsch wasn't going to delay reaching out to his advisors. Hirsch, anticipating the rule's announcement this week, sat down with more than two dozen advisors to meet with Scott Stolz, the firm's president of insurance groups, and with representatives from the asset management team.
"I'm applauding the new rule. It will be good for clients. It will be good for the firms, and I think a place like Raymond James will come out a winner," he says.
A Raymond James spokeswoman says the firm had suggested improvements to the original proposal. Like its competitors, Raymond James is now reviewing the final regulation to see how it can best support its advisors and keep costs down for clients.
"We believe that carefully studying the rule will take time," she says, "but are hopeful that a thoughtful response will yield the best outcome for clients and their advisors."
Merrill Lynch attempted to allay advisor concerns and asked them to identify clients who may be affected by the new rule, an advisor said after receiving an internal corporate email with the information.
"Honestly, I think it's a good thing," said the advisor. He requested anonymity because he wasn't authorized by the firm to speak to the press.
"You want to protect the people. In some cases, it makes more sense to keep things in a retirement account," the advisor said. "Yeah, it hurts the industry, but it is what it is."