Half of advisors overall have started to determine which of their accounts might be appropriate for level-fee compensation or would need a prohibited transaction exemption like the Best Interest Contract Exemption (BICE). Nearly 40 percent of respondents have already determined which accounts can use a level-fee model.
The respondents expected to manage 67 percent of their retirement assets via a level-fee compensation model, and advisors anticipate increasing their use of fee-based compensation by 10 percent to offset a 10 percent drop in commissions.
The advisors said that 30 percent of their retirement assets would have to be managed by leveraging an exemption like the BICE, and 20 percent of advisors have already determined which accounts may be appropriate for such an exemption.
Fidelity’s survey found that one quarter of advisors expected to see a positive impact on their ability to acquire and retain clients and to grow or maintain a profitable book of business, twice the number of advisors who felt the same in January. Broker-dealers gained the most in optimism throughout the year while 9 percent of them expected a positive impact from the rule in January, when surveyed in August, 24 percent of broker-dealers felt like the rule would help them maintain and grow their business.
Other channels have become more optimistic as well since the January survey: In August, 28 percent of RIAs felt that the rule would positively impact their businesses, a 6 percentage point increase from January, and 19 percent of national brokerage advisors felt that the regulation would help, an 8 percentage point increase.
As a result of the rule, one in five respondents indicated that their firm is actively pursuing acquisitions, and nearly a quarter suggested that their firm will more actively pursue retirement assets.
For the study, Fidelity surveyed 485 advisors online between January 6 and January 12, 2016, and 459 advisors from August 17 to August 26, 2016.