DOL from the Client’s View


In a recent survey, Spectrem Group asked a sample of 1,000 affluent investors questions about the DOL’s fiduciary rule. They found that awareness of the rule was relatively high with 65% of respondents claiming to be familiar or very familiar with it. This share rose to 91% for wealthier respondents with over $5 million in net worth.

A majority of respondents (65%) also answered “yes” when asked whether they believed a fiduciary rule was necessary for advisors working with retirement accounts. However, when asked if they would be willing to pay more for a fiduciary advisor on a 0-100 scale their willingness came in at a low 39.2%. For those in the over $5 million net worth group this level rose to a still underwhelming 49%.

Our experience interviewing the HNW and UHNW client bases of leading wealth management firms is consistent with these results. We find that clients tend to embrace the fiduciary model and largely expect and hope that advisors will work in their best interest. In line with fiduciary intent, affluent investors also tend to value clarity, simplicity, transparency and proactivity on the part of advisors in providing services that suit their needs. At the same time, however, there is rising sensitivity to costs and expectations for “reasonable” and fair pricing.

Whether, or in what form, the DOL rule comes into effect, those firms interested in meeting the expectations of the affluent market would do well to take steps to satisfy the spirit of the potential regulation regardless of the government’s final ruling.