More On Legal & Compliancefrom The Advisor's Professional Library
- Updating Form ADV and Form U4 When it comes to disclosure on Form ADV, RIAs should assume information would be material to investors. When in doubt, RIAs should disclose information rather than arguing later with securities regulators that it was not material.
- Client Commission Practices and Soft Dollars RIAs should always evaluate whether the products and services they receive from broker-dealers are appropriate. The SEC suggested that an RIAs failure to stay within the scope of the Section 28(e) safe harbor may violate the advisors fiduciary duty to clients, so RIAs must evaluate their soft dollar relationships on a regular basis to ensure they are disclosed properly and that they do not negatively impact the best execution of clients transactions.
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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