Fiduciary Rule May Spell Opportunity

By ASPPA Net Staff • April 12, 2016 • 0 Comments
When life hands you lemons, make lemonade. So goes the oft-quoted maxim — and recent assessments suggest that it even may apply for those who anticipate that the fiduciary rule the Department of Labor (DOL) released on April 6 may create challenges.

A recent report from Cerulli Associates, as well as Beacon Group Managing Partner and Co-Founder Brian Menickella, argue that the implementation of the DOL’s new rule could spur innovation in platforms and products, Institutional Investor reported recently. Russell Investments’ Director of Regulatory and Strategic Initiatives Jean-David Larson agrees, remarking that the rule affords an opportunity to make processes more efficient and create model portfolios.

The rule also could spell development and implementation of new technology. So says Cerulli’s report, and Cerulli Managing Director of U.S. Research made a similar comment in a recent blog entry with the Investment Management Consultants Association: “The true impact of the DOL’s Conflict of Interest Rule may not be immediately felt, but it will lead to a period of product and platform innovation at BDs and manufacturers.” Larson and Menickella agree that technology can play a role in how firms respond and apply the rule.

And firms that have already been using technology to make adding and serving new clients more efficient may already enjoy an advantage since they have the jump on their competition, Institutional Investor suggests.