Merrill Lynch Shrugs Off Fiduciary Rule Uncertainties

Tom Burroughes

10 March 2017

said clients can also choose the option of paying a fee based on the value of account assets.

For the majority of Merrill’s clients, its primary approach for delivering ongoing advice and service for the retirement accounts is its Investment Advisory Program. The firm serves as a fiduciary to 537,000 clients in the IAP, including $208 billion in Individual Retirement Accounts, or more than half of our total IRA assets under management.

Merrill is maintaining product restrictions put in place including purchasing Mutual Funds in brokerage IRA. (These run alongside other products restrictions put in place such as non-tradable REITS, special investments, Life Insurance, Health Saving Accounts, Education Savings accounts).

The firm is understood to be working on adding additional products to its IAP, such as annuities; as products are added to the platform they will become restricted in brokerage IRAs.

The US firm said there may be limited situations where fee-based arrangement may not be in clients’ best interest. Merrill is looking at possible alternatives to the IAP for some clients.

“Washington, Merrill Lynch remains steadfast in its commitment to provide investment advice in our clients’ best interests, particularly with respect to their retirement accounts. As you know, since 2010 we have consistently and publicly supported the adoption of a higher standard for personalized investment advice, including through the rule-making processes of the SEC and the Department of Labor. And today, we serve as a fiduciary to 537,000 clients in our Investment Advisory Program, including $208 billion in IRAs, or more than half of our total IRA assets under management,” Andy Sieg, head of Merrill Lynch Wealth Management, said in an internal memo seen by Family Wealth Report.

“As we’ve worked over the last year to meet the requirements of the DoL’s Conflict of Interest Rule, we’ve recognized that there may be limited situations in which a fee-based arrangement would not be in a client’s best interests. We are reviewing those limited circumstances to consider potential alternatives to IAP for some clients in a manner consistent with a higher standard of care. While we are prepared to implement the DoL Rule in April, a delay of the Rule’s April 10 applicability date may provide us with additional time and flexibility as we work through these issues,” Sieg said.