"The fiduciary standard is very open-ended," Bienfang says. "There's a lot of judgment within that standard of what's in the best interest of the client. I don't know how you can map that out with programming language."
Similarly, RIAs will have to rely on more extensive compliance reporting tools to meet the expected regulatory changes. According to Bienfang, some platform providers don't currently provide RIAs with enough tools to meet tougher reporting requirements. But that could easily be rectified.
"RIA platforms are basically the same as those used by brokers," Bienfang says. "So there are a lot of tools and capabilities on the broker side that could be transferred to the advisor platform, and some do that already."
And platform providers that roll out value-added programs to help customers better handle expected regulatory changes will further ingratiate themselves with their clients, Bienfang says.
Ultimately, TowerGroup believes a new regulatory landscape is needed because neither the broker nor the advisor model are going away, and the industry needs to harmonize its rules mitigate confusion between the two camps.
"We don't believe there can be a single standard," Bienfang says. "I believe the principles-based model is superior, but there will always be a need for brokers who sell a product."