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"There's no stopping this train," said Denise Valentine, senior analyst at Aite Group. "It's a law until someone says it's not."
The suddenly uncertain regulatory landscape poses difficult choices for firms that have undertaken changes to comply with the rule. Many would prefer not to change their business models, but they have also invested large sums to do that and in some cases adopted marketing strategies that emphasize their new and improved fiduciary posture.
"If there is no obligation to change, it's hard for firms to justify making costly changes," said Blaine Aikin, executive chairman of consultant fi360 and an expert on fiduciary issues. On the other hand, if they rely on the rule being repealed, they could be sorely disappointed. "It's a risky course of action to do nothing," he added. "There could be repercussions in the marketplace and with regulators."
Wayne Bloom, CEO of Commonwealth Financial Network, an independent broker-dealer and registered investment advisor with 1,650 advisors managing about $100 billion in assets, is taking no chances. Prior to the election, his firm announced it would scrap commission-based retirement accounts and lower the asset minimums for fee-based accounts, thereby avoiding the headaches involved in qualifying for exemptions from the DOL's best-interests contract.