The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:When Digesting the Fiduciary Reg, Watch the Distributors Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, April 7, 2016

When Digesting the Fiduciary Reg, Watch the Distributors

Reported by Neil Anderson, Managing Editor

As you're contemplating the new fiduciary regulation, keep an eye on your distribution partners and watch out for fee pressure and passive.

Todd Rosenbluth
S&P Global Market Intelligence
Director of ETF/Mutual Fund Research
Yesterday the U.S. Department of Labor (DoL) handed down its final, revised "conflict of interest" rule for the retirement plan industry, which clocks in at a whopping 1,418 pages in total when you count the reg itself, the related exemptions and exemption amendments, and the regulatory impact analysis. For fundsters not yet ready to make that kind of commitment to some dry reading material, here are some food-for-thought quick takes on what the reg means for the mutual fund industry.

Todd Rosenbluth, director of ETF and mutual fund research at S&P Global Market Intelligence, argues that the reg is going to contribute to the continued rise of passive investments, ETFs, and no-load funds. Funds that are higher cost, with trailing loads, "may no longer meet this new higher level of fiduciary standard" because figuring out the "best interest of clients is often going to include a cost discussion," Rosenbluth says.

"Expensive funds that have a below average track record may no longer be held within a client portfolio," Rosenbluth tells MFWire "An advisor may no longer have the patience for something that they previously did."

"This is going to negatively impact active managers, particularly those that have higher cost products," Rosenbluth adds. "[The regulation] is less onerous than it could have been ... but that's at the margin. This is still a long-term favorable move towards passive strategies."

Cindy Zarker, director of relationship development at FUSE Research Network, says that "fund firms are really going to have to digest the rule, especially smaller and mid-size firms."

"They've been waiting to see a final rule until they really delve into it and to some degree waiting to see what broker-dealers do," Zarker tells MFWire. "Most firms have formed some sort of group to look at the rule and see what they need to put into place ... Now that they have a final rule they can start to really work through it."

"To some degree it's all dependent on how the distributors react," Zarker adds.  

Stay ahead of the news ... Sign up for our email alerts now

 Do You Recommend This Story?

Return to Top
 News Archives
2024: Q3Q2Q1
2023: Q4Q3Q2Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Add to My Yahoo!
follow us in feedly

©All rights reserved to InvestmentWires, Inc. 1997-2024
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use