The New DOL Fiduciary Rule will not only generate a large amount of industry confusion, it will also force plan providers, retirement plan advisors and plan sponsors to adjust the lenses through which they view their service providers and vendor agreements.
Buyer beware when this new set of product offerings emerge, as some will be developed to satisfy a specific need, while other new products will be constructed and packaged to only confuse all interested parties. Cerulli Associates’ Bing Waldert Managing Director states directly ”their research expects that there will be unexpected changes to the retirement and wealth management industries.”
At the onset of the rule revision, everything will be ripe for change. It will be difficult for plan sponsors to distinguish if new product offerings are a panacea for the industry or if a new product is no more than just a well-timed marketing opportunity. It will be up to each retirement plan sponsor to “know the advisor” who is proposing a new product or solution.
All new post-DOL-Rule-Change products will not be created equal. Some will be in response to the change and thus will serve distinct needs. These include the topics of: robo-advisors, low balance scale-able brokerage solutions, prepackaged fund-lineups (where the professional advisor will remain arms-length in the selection of individual funds or individual securities) and variable annuities carrying lower costs and management fees.
