Orion launches fee analyzer for DOL fiduciary rule

Benchmarking tool will help advisers show reasonable compensation, firm says

Dec 27, 2016 @ 11:59 am

By Liz Skinner

Advisers looking for help proving they're charging a “reasonable” fee once the Labor Department's fiduciary rule for retirement advice kicks in next year have a new source for comparison.

Orion Advisor Services is offering a fee benchmarking tool that allows advisers to filter based on the type of account, its size and the services the firm is providing. The fee analyzer will compare an account's fees against a million other managed accounts, the firm said on Thursday when it announced the availability of the product.

(More: What is reasonable cost under DOL fiduciary rule? Well, it depends)

“The new fee-benchmarking tool will help advisers see how their fees compare to the industry, ensuring they are charging fair, reasonable fees," said Eric Clarke, chief executive of Orion Advisor Services.

The DOL fiduciary rule requires financial professionals offering retirement advice to make recommendations in the best interest of clients. It includes a mandate that compensation be “reasonable,” however, it does not offer specific prescriptions on how that should be calculated or determined.

Most agree some sort of comparison to what others advisers charge for similar services will be acceptable, as this type of benchmarking is a common practice among 401(k) fiduciaries to determinate reasonable cost for a particular service.

(More: The most up-to-date information on the DOL fiduciary rule)

Orion, best known for its portfolio accounting services, is one of the first to get its tool out the door, but other fintech providers, compliance firms and broker-dealers are working up their own offerings.

For instance, Fiduciary Benchmarks last Monday introduced a tool to help advisers collect and evaluate client data. It will recommend retirement products that are in the client's best interest, incorporating a tool that determines fee reasonableness, the firm said.

That product can apply to evaluating rollover recommendations and assessing level fees, compared to commissions.

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