More On Legal & Compliancefrom The Advisor's Professional Library
- Using Solicitors to Attract Clients Rule 206(4)-3 under the Investment Advisors Act establishes requirements governing cash payments to solicitors. The rule permits payment of cash referral fees to individuals and companies recommending clients to an RIA, but requires four conditions are first satisfied.
- The Custody Rule and its Ramifications When an RIA takes custody of a clients funds or securities, risk to that individual increases dramatically. Rule 206(4)-2 under the Investment Advisers Act (better known as the Custody Rule), was passed to protect clients from unscrupulous investors.
Less than a week after Bank of America-Merrill Lynch (BAC) settled a lawsuit with some 700 black brokers to the tune of $160 million, the wirehouse has agree to pay $39 million to resolve a lawsuit filed in Brooklyn, N.Y., involving about 4,800 female advisors who work or have worked previously for the firm.
“We are pleased to resolve this matter, which was filed in 2007 before Merrill Lynch was acquired by Bank of America,” the bank said Friday in a statement. “The resolution includes a number of additional and enhanced initiatives that will enrich our existing diversity, inclusion and development programs, providing even more opportunities for women to succeed as financial advisors.”
In the lawsuit, the advisors charged Bank of America-Merrill Lynch with gender discrimination tied to certain policies, from account redistribution to how advisors were put into teams.
“This settlement helps ensure that Merrill Lynch is a place where women can thrive and be successful,” Cara E. Greene, a lawyer for the plaintiffs, said in a statement shared with Bloomberg “Hopefully others will follow Merrill Lynch’s example.”
As part of the settlement, the company, which made no admission of wrongdoing or liability, agreed to put in place certain measures that will be overseen by an independent monitor. These issues include team formation and partnership agreements, business generation, account distributions, manager evaluations, promotions, training and complaint processing and procedures.
In addition, an independent consultant will conduct an internal study of Bank of America’s team formation practices, according to a spokesperson. The bank says it founded the Global Wealth Investment Management Women's Exchange in 2004 with 34 members; the group now includes some 4,000 advisor and non-advisor members.
As of June 30, the number of Merrill Lynch financial advisors was 15,759, while the number of GWIM advisors was 16,989. The total headcount for client-facing financial professionals was 19,689.
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