Merrill Lynch is reversing a ban on commission-based retirement accounts which it had introduced in response to the Department of Labor's now-defunct fiduciary rule, according to a person familiar with the matter.
"In response to client feedback, we're announcing steps today that will provide our clients with greater choice and flexibility, while maintaining our support for a best interest standard for investment advice across all accounts," Andy Sieg, head of Merrill Lynch Wealth Management, said in a statement.
The firm will reintroduce brokerage capabilities in individual retirement accounts by Oct. 1, according a person familiar with the matter.
Merrill Lynch will also review its supervisory routines for clients' brokerage activity. The firm also intends to provide additional disclosure information about the brokerage relationship to clients.
The firm is also monitoring the SEC's progress on its proposal to update standards of conduct for brokers and advisors, known as Regulation Best Interest. Merrill Lynch will update its brokers on these developments at a later date.
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Fiduciary advocates lament the absence of the term from the SEC's rule, which they say fails to move beyond FINRA’s existing suitability standard, while the brokerage sector sees the proposal as a welcome jump in oversight.
June 15 -
Investment advisors and broker dealers have different “relationship models” with clients, the chairman says.
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What should advisors expect from the upcoming regulation?
May 18
The policy reversal may please some brokers who felt constrained after losing the option to offer clients a brokerage option for retirement assets. In the period after
Clashes over the Labor Department's fiduciary rule have carried over into the debate on the SEC's proposed regulation.
Merrill Lynch took what some saw as an aggressive and
Merrill Lynch's positioning on the fiduciary rule was significant not least because of the firm's long history, brand recognition and size. It currently has roughly 14,800 advisors overseeing $2.3 trillion in client assets.
Of course, Merrill Lynch was not alone in adopting new policies to comply with the now defunct regulation, with many firms cutting a number of funds available on their platforms for compliance reasons.
Morgan Stanley, for example,
And
The SEC is currently reviewing the proposal after soliciting in thousands of public comments on the regulation.