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Complying with the DOL Rule: What and by When

Many advisors are waiting for word from their BD or RIA about how they are going to deal with the DOL conflict-of-interest rule before they can figure out how they will need to change their business – or BD/RIA.

In preparation for the rule, firms are reviewing and often winnowing down fund lineups as well as consolidating share classes. For the April 10, 2017 deadline, they will need to more closely scrutinize rollovers from 401(k) plans, mutual fund sales and client communications. Ongoing risk management, fee calculations, and elimination of conflicts will be needed for the Dec. 31, 2017 deadline, as well as archiving and reviewing data.

At a recent workshop for advisors conducted by TRAU, the implications of the DOL rule were not just top-of-mind for advisors, but also for their clients, who are asking lots of questions. The experienced plan advisors in the room mostly saw the fiduciary rule as an opportunity, as more of the advisors in their network that had a few plans are more willing to partner – some at a lower referral rate. Most were still waiting for word from their BDs to make final plans.

But even though it was conceded that there will be more opportunities from advisors that want out or plans that are orphaned, unanswered questions included:


  • Will the fact that the act of referring another advisor is a fiduciary act slow referrals?

  • Will providers, concerned about fiduciary liability, be able to refer cases to experienced advisors?

  • How can experienced advisors find opportunities with advisors looking to exit?

  • Can advisors make money even with a relatively low 25% referral fee with margins going down anyway?

  • Can advisors justify paying another advisor a percentage of the fee if they do not add any value?


A recent whitepaper by Broadridge outlining steps firms need to take to comply — and when — gives advisors some insights into what their BD or RIA is going through and how they should pivot their businesses. There are two important dates:

  • April 10, 2017, when the rules goes into effect

  • Dec. 31, 2017, when the BIC exemption rules kick in


By April 10, 2017, Broadridge suggests that firms will have to:

  • Create compliance tools

  • Draft and distribute fiduciary acknowledgement letters

  • Update websites

  • Conduct training

  • Redesign workflows


By Dec. 31, 2017, firms will need to:

  • Aggregate prior communications

  • Draft fiduciary acknowledgment letters for new accounts

  • Benchmark all fees

  • Archive advisor recommendations

  • Redesign workflows

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