He called the rule “a great first step in the right direction toward empowering investors because comparison will be mandatory,” he added.
In January, a Morningstar survey found that a third of B-Ds were not prepared for Reg BI. But that changed “literally over the last month, when firms began calling us and asking ‘What do I need to do to meet this obligation?’ Many firms are now furiously trying to prepare,” Radgowski said.
The trigger may have been the stern SEC reminder that went out in mid-January warning firms that the rule would not be delayed or rescinded and that they needed to be prepared.
“When that mid-January alarm bell went off, we really saw firms accelerate activity,” he added.
Firms are also engaging Morningstar to screen their platform offerings for reasonable alternatives. “At this point, we’ve engaged with a lot of firms regarding conversation about revisiting their product shelves to make sure quality regarding risk, performance and cost are there,” Radgowski said.