With the Department of Labor’s Conflict of Interest rule likely to be issued in the next few weeks, we are approaching an important milestone for our industry. Not only will financial advisors be subject to a higher fiduciary standard on IRA Rollover and other retirement advice, but also we are taking a first step toward a transformation in the way financial products and advice will be provided to retail investors in the future. Once the rule takes effect, we anticipate that the Securities and Exchange Commission will follow the Department of Labor’s lead and the industry will move toward a uniform fiduciary standard. Forward-thinking financial services firms are embracing the possibility of this change and are assessing how their value proposition to their clients and advisors should evolve in the future, in addition to executing a regulatory readiness program today.

How much progress have financial services firms made in preparing for the change? Most financial service firms have already established their remediation programs. Leading firms are a long way down the path in terms of assessing impacts, identifying and making strategic decisions and establishing their readiness plans. Other firms are not as far along.

At this point in time, we recommend that every affected financial services firm have a team ready to rapidly assess the differences between the proposed and final versions of the rule as soon as it’s issued. The implications of the changes and their impacts on a firm’s strategic decisions and plans will need to be reviewed. Given the short implementation period and scope of the changes, most firms will need to begin executing their readiness plans immediately across every area of their business: from products, distribution, and operations, to IT and compliance. Above all, the planned changes must be communicated effectively to both advisors and clients.

If you would like more information, please contact me, Charles Ludden, to discuss.

Visit the Accenture Regulatory Insights blog for more details on the Department of Labor Retirement Advice Fiduciary Rule.

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