Merrill Lynch May Keep Commission-Based Retirement AccountsMerrill Lynch May Keep Commission-Based Retirement Accounts
The about-face comes after President Trump ordered the Labor Department to delay its fiduciary rule.
March 9, 2017
By Elizabeth Dilts
March 9 (Reuters) - Merrill Lynch, a unit of Bank of AmericaCorp, may not entirely do away with its commission-basedretirement accounts, after Trump ordered the Labor Departmentlast month to delay the proposed retirement-savings rule.
In a conference call with the advisors on Thursday, the banksaid it plans to shift most of its retirement savers to accountsthat charge a fee based on percentage of assets from those thatcharge a commission, according to a source familiar with thematter.
However, Andy Sieg, head of Merrill Lynch Wealth Management,noted in a memo seen by Reuters that the account conversions maynot apply to all of its customers.
"We've recognized that there may be limited situations inwhich a fee-based arrangement would not be in a client's bestinterests. We are reviewing those limited circumstances toconsider potential alternatives to IAP for some clients in amanner consistent with a higher standard of care," Sieg said inthe memo.
Last month U.S. President Donald Trump ordered the LaborDepartment to review the implementation date of the newfiduciary rule, proposed by Obama, which was set to take effectin April.
The proposed rule was staunchly opposed by the financialservices industry. Wall Street had argued that the rule wouldharm consumers as it would raise compliance costs and thereforefees, and force them to get rid of Main Street clients and smallbusinesses that offer 401(k) plans.
Merrill Lynch was not immediately available for comment.
The Wall Street Journal had earlier reported that MerrillLynch was planning to still offer commission-based retirementaccounts. (Reporting by Vishal Sridhar in Bengaluru and Elizabeth Diltsin New York; Editing by Sunil Nair)
