Looking at Reg BI readiness, almost all broker-dealer leaders polled by this publication say they are somewhat or veryprepared for the regulation, 97%. Many view these changesas entailing significant shifts in the industry, 37%. Others aresplit over whether Reg BI likely will produce some compliancechallenges and confusion, 31.5%, or have only limited impacton the broker-dealer’s compliance programs and costs, 31.5%.
For BDs with advisors in the Bay State, the new fidu-
ciary rules that took effect March 6 will start to be enforced
Sept. 1. They require broker-dealers and their agents to pro-
vide investment advice and recommendations “without regard
to the interests of anyone but the customer.”
The Setting Every Community Up for Retirement Enhancement
(Secure) Act of 2019 is seen as positive or neutral for investors by
97% of BD leaders. Most execs surveyed, 71%, don’t see it as over-
burdensome. It’s been praised for pushing back the age (to 72) for
required minimum distributions and criticized for eliminating the
“stretch IRA” that allowed for lifetime IRA distribution to heirs.
Returning to the topic of compliance, BD execs say theyplan to boost spending on compliance this year, 95%. It’s thetop spending priority vs. technology and platforms, 85%, andRIA/fee-based programs, 82%.
Other important areas likely to require more financialresources than last year include business-growth/coaching,73%; mergers and acquisitions/recruiting/succession planning, 71%; and new services, 44%. Bitcoin/cryptocurrenciesefforts are not expected to see higher spending.
Even with higher spending and great compliance burdens,a whopping 91% of broker-dealer leaders remain confident inthe outlook for the business.
18 Will your BD increase what it spends
this year on the following?
ComplianceTechnology/IT PlatformsRIA-focused programs/fee-based businessBusiness-growth programs/coachingM&A/Recruiting/Succession PlanningNew services (like trusts)
13 How prepared are you for the SEC’s Reg BI?
16 How much time/effort have
you and your advisors needed for
changes tied to the Secure Act?
17 What’s your view of the impact
of the Secure Act on your advisors’
14 What’s the likely outcome from
Reg BI for your BD and for the industry?
15 What about the final
Massachusetts fiduciary rule?
19 Is your BD working on Bitcoin/
20 Are you confident the independent
BD model will be viable in the long term?
54% | Very
Significant change Some compliance
Minor impacts on
compliance programs/costs Significant change
challenges/confusion Minor impacts on
3% | Not much
43% | Somewhat
A great deal