The industry, and especially advisors themselves, have been railing against the fiduciary rule for over a year now, but one inevitable reality is taking hold—the rule is good for owners. We say owners, not advisors, as compensation will not be helped by the rule, but overall profits will. Raymond James is a good example, as the company just reported record revenue and profit growth for the second quarter, all on the back of the changes being pushed by the fiduciary rule. Yet despite this, it also cut broker pay by 100 basis points. The firm says it is in a challenging period of restructuring operations and putting brokers through extensive training sessions.
FINSUM: The bottom line with this rule is that most advisors don’t like it, while firms love it. Revenues and profits will rise, boosting margins, but advisors will likely be left hanging.