Estimating Expenditures, Revenue Loss and Strategic Consequences

The decision to use the Best Interest Contract Exemption ("BICE") for ERISA and IRA business carries significant economic and strategic consequences. The actual costs, revenue losses and competitive advantages or disadvantages vary greatly based on a firm’s specific business mix and other factors.

This paper outlines the principal factors that should be considered when contemplating using BICE and the potential economic and strategic impact on an advisory firm.

A model firm is used to show the BICE budget impact. For this model firm the initial impact of BICE is 13.2% of a year’s retirement revenue. The impact in the following year grew to 22.0%. Other alternatives are shown to be less costly. (Includes Excel Worksheet)



You may also like...

For more information about DALBAR's QAIB, please contact Cory Clark at 617.624.7156.