A survey released Monday finds 85 percent of investment professionals expect that more of their firms’ budgets will be allocated to adopting technology that will help them comply with the the federal Department of Labor’s Fiduciary Rule.
One third of respondents estimate that their firms will allocate 10 percent to 25 percent of their budgets for this purpose, according to the results of the survey conducted by Windsor-based SS&C Technologies Holdings Inc.
According to Investment News, the rule would require financial advisers to act in the best interests of their clients in 401(k)s, individual retirement accounts and other qualified accounts. Supporters say it will protect middle-class savers from high-fee products that only benefit the adviser’s bottom line. Opponents say the rule significantly increases regulatory costs and makes investment advice more expensive.
The House and Senate, in separate bills, have voted to overturn the rule. President Obama has said he will veto either bill if it reached his desk.
When asked about the specific technologies that firms will need to adopt or enhance to comply with the DOL rule, SS&C found 18 percent of investment professionals reported client portal/document management capabilities will be top of mind. This was followed by billing – fee scheduling and disclaimer support (14 percent), portfolio management and reporting (14 percent), and financial planning (13 percent).
The survey said more than three quarters of investment professionals (80 percent) expect the DOL rule to specifically impact policies, procedures and technology systems at their firms.
More than half (62 percent) of investment professionals believe complying with the rule will affect the makeup of their client base while 58 percent of the Registered Investment Advisors (RIAs) polled expect minor impacts to the types of clients they currently serve, compared to 53 percent of independent broker-dealers surveyed.
