Merrill Lynch may consider delaying or reversing some previously announced policies meant to comply with the fiduciary rule, including a pledge to cease offering commission-based retirement accounts.
Andy Sieg, head of Merrill Lynch, says his firm has been working to deliver
The regulator plans to ramp up scrutiny of bad brokers and electronic communications, among other new measures.
When asked if Merrill would
"It's very hypothetical. We're going to operate on a best interest standard. We feel very comfortable with the approach we have articulated and believe it will serve us in good stead with what is to be the law on April 10," Sieg says in an exclusive interview.
He declined to give more specifics about possible changes. "To the extent that the law is changing we will always have programs in place that operate within the law," he added.
"Minimizing or eliminating conflicts, operating with transparency, demonstrating prudence — those concepts are the guiding star for the efforts we have been driving and will be driving over time," says Andy Sieg, head of Merrill Lynch.
'NOT GOOD PR'
With over 14,500 advisers and more than $2.1 trillion in client balances, Merrill Lynch is something of a trend setter for the industry.
And it's not the only firm to have outlined plans to implement
LPL Financial and other firms have announced plans to cut fees and add more transparency in terms of how advisers are compensated. Moreover, some companies publicized their plans. In November, Merrill advertised its position on the Labor Department rule.
"We're committed to your best interest. Not the status quo,"
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Some firms reserve comment on the president's order, despite public support for the fiduciary rule in the past.
February 8 -
Rule supporters say they intend to continue making their case on Capitol Hill.
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After investing millions in new platforms and preparing thousands of advisers, executives say they've come too far to reverse course.
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Here’s what the president’s actions mean for advisers and firms.
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The wirehouse also
For some firms, walking back commitments and policy announcements could prove to be problematic.
"It is not good PR to be publicly walking away from a best interest standard," says Barbara Roper, director of investor protection at the Consumer Federation of America.
Roper says one of the rule's benefits is that it has an accountability mechanism. She also notes that other firms have been vocal opponents.
"What I expect is a lot of non-committal statements about waiting to see what emerges from this reconsideration [of the regulation] and a lot of empty statements about a best interest standard, which is a safe thing to say if no one will hold you legally accountable to it," she says.
'A LONG-TERM STRATEGIC EFFORT'
Several large independent broker-dealers, including
For his part, Sieg emphasizes that Merrill is not amending its approach or policies at the moment.
"We are of course watching Washington closely. To the extent that there are delays, we will watch that because we want to make sure we are implementing our best interest standard well and that clients understand the changes that are taking place," he says.
The firm has been moving in that direction for some time, he adds. For instance, Merrill Lynch recently said it would
"There are aspects of delivering a best interest standard of care to clients that are pretty timeless principles. Minimizing or eliminating conflicts, operating with transparency, demonstrating prudence — those concepts are the guiding star for the efforts we have been driving and will be driving over time," Sieg says.
He highlighted the efforts of his predecessor, John Thiel, to implement changes designed to improve the service clients received. Sieg, who has worked at Merrill since 1992, took over as head of the firm in January.
"We did not jumpstart an effort here because we saw Washington coming," he says. "This has been a long-term strategic effort for us to raise the standard of care."
Sieg, looking at developments in Washington, noted that "deregulation across industries is in the air," but urged a note of caution.
"Let's be sure not to throw out the good with the bad," he said.
