A new survey finds 79 percent of financial advisors support the ERISA fiduciary standard for advice to investors on rollovers from 401(k) and IRA retirement accounts.
According to a release, the finding comes as the
The 2013 fi360-
The survey measures the attitudes of financial intermediaries toward the fiduciary standard and how they apply fiduciary principles – or not – in practice. More than 380 advisors from a broad set of business models, registration types and compensation schemes provided their views. Participants included registered investment advisers, investment adviser reps (RIA/IARs); broker- dealer registered reps; dual registrants – who are both RIA/IARs and BD registered reps; insurance consultants and insurance producers. Their clients include individual and retirement investors.
"This support for the fiduciary standard for retirement investors, coming from registered reps and investment advisors across the spectrum of business models is very compelling," said
In other survey results, advisors largely rejected the arguments of opponents of placing investors' interests first by extending the fiduciary standard for advice. Opponents have argued that the fiduciary standard would increase investors' costs and limit their access to advice and products. But survey respondents said extending to fiduciary standard to brokers:
-Would not cost investors more for advice (79 percent).
-Would not price investors out of the market for advice (69 percent).
-Would not limit access to advice or products (68 percent).
Survey participants strongly agreed that investors are unaware of the differences between the fiduciary standard governing investment advisers and the much lower "suitability" standard used by the brokers. Of the advisors participating in the survey:
-97 percent say investors don't understand the differences between brokers and investment advisers.
-72 percent say the titles "advisor," "consultant," and "planner" imply a fiduciary relationship exists.
-82 percent say disclosures alone are not sufficient to manage conflicts of interest.
On the retirement issue, advisors said the ERISA fiduciary standard that applies to advice to retirement investors in 401(k) accounts should also apply to IRAs and rollovers from 401(k) and IRA accounts.
-79 percent agree that ERISA fiduciary duty should cover advice on rollovers out of 401(k)s and IRAs.
-72 percent say the ERISA fiduciary duty that applies to 401(k)s should also apply to advice on IRAs.
-61 percent agree that the
"Though regulators may still be considering whether and how to impose a fiduciary standard on advice givers," said
The survey also showed that compensation models make a material difference in how intermediaries interact with investors.
-Commission-only and commission/fee participants lean away from the fiduciary standard, while fee-only and fee-based participants lean toward the fiduciary standard.
-Most commission-only and fee/commission (more commissions than fees) would rather be fee based (more fees than commissions) or fee- only.
"Last year's survey provided a wealth of data and we were thrilled to be fielding this survey in partnership with ThinkAdvisor again this year," Aikin added.
Fi360 offers fiduciary Training/Education, Tools and Resources that are essential for fiduciaries and those who provide services to fiduciaries.
ThinkAdvisor.com offers the Investment Advisory community access to the knowledge, information and critical resources.
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