Skip to main content

You are here


Merrill Lynch Makes Another Fiduciary Rule Move

The effective date of the Labor Department’s fiduciary rule is still months away, but Bank of America Merrill Lynch has taken another step in anticipation of its impact.

According to ThinkAdvisor, the broker-dealer has said that, effective immediately, purchases of mutual funds in existing IRA accounts are no longer allowed. That announcement comes less than a month after Merrill that it would no longer give retirement savers the option of paying a commission for trades after April 10, when the new fiduciary regulation takes effect. The move echoes a similar stance communicated by Edward Jones back in August.

In a memo, Frank McDonnell, head of Global Mutual Funds, noted that, “We are implementing this decision in advance of the DOL rule’s applicability date, to ensure as seamless and positive experience for our clients and advisors as possible.”

According to Merrill, clients looking for alternatives to commission-based funds in their IRAs can turn to the firm’s Investment Advisory Program (IAP), Merrill Edge Select Portfolios, the Merrill Edge self-directed channel and Merrill Edge Guided Investing (beginning in January). “Each of these offerings will be augmented on an ongoing basis to ensure choice for our clients,” it said, according to the report.

Changes Ahead

It’s the latest in a series of product and compensation structure announcements in response to the Labor Department’s fiduciary rule. Cambridge is the latest firm to announce its intention to continue supporting commission-based fees for retirement accounts, joining Cetera Financial, Raymond James, Morgan Stanley and Ameriprise. Meanwhile, in addition to Merrill Lynch, Commonwealth Financial Network has opted to move away from offering commission-based products in the retirement accounts they serve.