Defined Contribution Participant Perspectives: Fifth in a Series

With the final compliance deadline for the DOL fiduciary rule now pushed out to July 1, 2019 it may still be too early to say how advisors are reacting. But some early signs are telling.


Most advisors have already made one or more changes as a result of the DOL fiduciary rule…

More than three-quarters (76%) of advisors report one or more new requirements from their broker/dealers as a result of the rule, the most common being the requirement to swap out certain funds or share classes for others (30%). A quarter to a fifth of advisors report a host of other changes as well including being required to work only with platforms offering 3(21) or 3(38) fiduciary services; requiring auto features and managed accounts in new plans and having to give up rollover advice they used to offer themselves. More than one in five (21%) have already had their plans transferred to an advisor who is compliant with the BD’s fiduciary requirements.

Unsurprisingly, “pure” RIAs (already almost 100% fee-based) report the fewest changes (52% say no change) while only 16% of hybrid (or dually registered) RIAs say they haven’t seen any change as a result of the rule. Hybrid RIAs are feeling the heat on every dimension tested but especially on giving up rollover advice (40% versus 23% for all advisors).

Wirehouse-based advisors are by far the most likely to have seen major impacts on their practices with virtually all (95%) reporting new requirements. Independent broker/dealer-based advisors are on the other end of the spectrum; they are much less likely than all advisors to face new requirements from their BDs on each dimension. IBD-based advisors are conspicuously less likely to be swapping out funds or share classes, implementing changes in plan design or seeing their plans transferred to a compliant advisor. Indeed, in contrast to wirehouses, it’s fair to wonder if IBDs are really taking the DOL seriously at this point.


…with wirehouse advisors the most likely to be making changes and IBD-based advisors the least

Advisors are in agreement on one aspect of the rule, however: it’s not over till it’s over. For every new requirement advisors have been asked to take so far, about half again as many expect to be asked to take this measure in the next two years. This story is far from over.


And advisors are expecting more changes in the next 24 months

About the Research

Voice of the Defined Contribution Participant (VDP) studies were launched in 2010 by Brightwork Partners LLC; Brightwork was acquired by NMG Consulting in 2017. Findings are based on selected VDP waves carried out between 2010 and 2017. These studies are conducted online among nationally representative samples of active 401(k), 403(b) and 457 participants.

For more information, contact: 

Merl W. Baker, 203.487.2000;

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