Wells Fargo Advisors Creates New Mutual Fund Class for Fiduciary RuleWells Fargo Advisors Creates New Mutual Fund Class for Fiduciary Rule
Starting June 9, the same day the DOL's fiduciary rule takes effect, advisers who want to buy mutual fund class shares for retired clients will be required to buy T shares.
May 25, 2017
By Elizabeth Dilts
NEW YORK, May 24 (Reuters) - Wells Fargo Advisorswill launch a new share class of mutual funds next month as partof its plan to comply with the new U.S. Labor Departmentregulation that seeks to put the interests of retirement clientsfirst, the bank confirmed Wednesday.
Starting June 9, the same day the DOL's fiduciary rule takeseffect, advisers who want to buy mutual fund class shares forretired clients will be required to buy T shares, which payadvisers a 2.5 percent commission upfront and a 0.25 percentgoing forward.
These shares differ from other mutual fund shares, such as Aor C shares, because the flat commission and ongoing fee theycharge eliminates any possible conflict of interest that couldencourage an adviser to recommend one type of mutual fund overanother for clients.
The DOL's fiduciary rule requires brokers to put client'sinterests first by avoiding investment products that couldpresent a conflict of interest.
Wells Fargo Advisors spokeswoman Emily Acquisto said thefirm is prepared for the June 9 start date of the new rule, andthey continue to asses evolve the firm's financial planningstrategy and tools "to ensure our clients have the best outcomesunder the rule."(Reporting by Elizabeth Dilts; Editing by Andrew Hay)
