Huge changes – including millions of dollars in compliance costs to the brokerage industry and higher costs to investors – are in store if the Department of Labor and Securities and Exchange Commission decide to adopt a uniform fiduciary standard.
It may be weeks, if not longer, before that decision is finalized but the question has been hanging over the industry’s head most of this year.
More than 75 percent of the broker-dealers said they planned to hire outside legal counsel to help prepare the guide.
The vast majority of the firms' estimated costs fell into out-of-pocket expenses and employee and staff-related costs, which included:
There are companies that might try to follow the Charles Schwab model, which works with both sides of the business.
“[Broker-dealers] will still exist, but because there will be less ability and incentive to provide the pure brokerage base, the pure revenue-sharing base, that part of the market will dry up and individuals will have to go to the advisory fee side or a firm that offers both,” Bleier predicted.
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