A new survey of asset managers and wealth managers finds a shift in perspectives on compliance with the fiduciary regulation, robo-advice, and passive investment strategies.
The survey, done in partnership between Cerulli Associates and the Investment Adviser Association (IAA), found a drop in those who viewed the fiduciary regulation/compliance an opportunity before the election — and a nearly equal drop in those who viewed those as a threat. According the survey, 56% of respondents now view that as neutral, compared with just 29% prior to the election. Now 28% view this as a threat, and 16% as an opportunity.
Perhaps on a related note, robo/digital advice platforms are viewed more favorably post-election: A third (32%) view these as opportunities post-election (up from 21% pre-election), and now just 12% view these as a threat, compared with 33% before the election. Similarly, passive/strategic beta strategies, viewed as threats by a third of respondents before the election, were viewed in that light by just 12% now. Moreover, a third (32%) of respondents now view these strategies as an opportunity post-election, compared with 21% pre-election.
Cyber ‘Sensitive’
The report notes that throughout 2016, concerns about volatile markets and fee compression continued to dominate mindshare at firms, followed closely by regulation and compliance issues. The Department of Labor’s conflict of interest rule and cybersecurity will remain at the forefront of a variety of challenges and opportunities stemming from the potential for regulatory changes. The report’s authors note that cybersecurity will become an area of growing concern.
With respect to cybersecurity and technology improvements, respondents indicate a need to catch up rather than get ahead, with 56% stating cybersecurity improvement as their No. 1 technology investment in the next year, consistent with other reports that have indicated that cybersecurity is advisers’ No. 1 compliance concern. Cerulli recommends that the scrutiny of third-party vendors be of utmost importance.
