Advisors, Investors Both Support DOL Rule, Insurer Finds

Advisors and individual investors, a new study says, tend to share the same main concern: government.

Advisors and investors are also aligned in their their support of fiduciary regulations, according to the recent Advisor Authority Study 2017 sponsored by Louisville, Ky.-based Jefferson National, a subsidiary of Nationwide Insurance.

Government and policy is dominating the concerns of both advisors and investors, according to the survey. Advisors named monetary policy, regulatory changes and Washington politics as the three most impactful trends on their investment decisions. Individual investors also named Washington politics and monetary policy among their top three concerns, but also named domestic economic performance as a major impact on their investment decisions.

Advisors rate global instability, interest rates and ongoing volatility as the three greatest macro issues impacting their client portfolios, while investors named political gridlock in Washington, global instability and taxes.

Despite some concerns from the wealth management industry, advisors and investors are largely aligned in their views of the Department of Labor’s fiduciary rule. Many investors and an overwhelming majority of advisors voiced support for regulations that implement some form of best-interest standard for financial advice.

Half of all investors would stop working with their financial advisor if they found out that their advisor was not required to deliver advice in their best interest. According to the survey, 48 percent of respondents said they would drop their advisor if he or she was not a fiduciary. One-in-four investors said that adherence to a fiduciary standard was a primary driver when choosing an advisor.

Nevertheless, overall awareness of the fiduciary standard is low among the general populace, according to the survey. While most advisors, 84 percent, were aware of the DOL rule, just 38 percent of the investors were aware of the regulation.

That may explain why 59 percent of the investor respondents believed that all financial advisors were required to be fiduciaries.

Most advisors, 83 percent, believed that a fiduciary model would benefit the growth of their practice regardless of the status of the DOL rule.

Jefferson National sponsored the Harris Poll survey of over 1,600 RIAs, fee-based advisors and individual investors between in March and April. Among the 779 financial advisors surveyed, there were 521 RIAs and 258 broker-dealer representatives, in addition to 817 investors.