Raymond James, Ameriprise Keeping Commissions in Retirement Accounts

The two broker-dealers, which have nearly 17,000 advisors, won’t relent to DOL fiduciary rule, insisting that investor choice is paramount

Raymond James headquarters in St. Petersburg, Florida. Raymond James headquarters in St. Petersburg, Florida.

This week, the two largest firms with both affiliated and employee advisors – Ameriprise Financial (AMP) with about 9,750 and Raymond James (RJF) with about 7,150 reps – made it clear that they want to keep commissions on the table after April 10, 2017.

In late-October, Morgan Stanley said it, too, would continue to offer such options to clients and advisors, while Commonwealth Financial stated that it would end such retirement accounts – a move taken by Merrill Lynch earlier in the month.

For its part, Raymond James says it expects legal and regulatory expenses related to DOL and other regulations “to remain elevated,” according to CEO Paul Reilly during a conference call Thursday with equity analysts.

As for why the firm has chosen to maintain commission-based accounts, “We've been very clear from the beginning that our focus has been complying with the rule [and] giving the maximum flexibility for our advisors to serve our clients and have clients have choice,” Reilly explained. “So we fully expect to offer commission-based accounts … and comply with the rule.”

Raymond James’ private-client operations include $574 billion assets of which $231 billion are held in fee-based accounts. 

Ameriprise’s Approach

“We continue to believe providing investor choice is important and therefore, we've been hard at work to enable both advisory and brokerage options for clients and advisors,” said Ameriprise Chairman & CEO Jim Cracchiolo, on a call with analysts Wednesday.

“We intend to use the [best interest contract or] BIC exemption for brokerage and other commissioned-based recommendations,” the executive stated.

Still, Cracchiolo said, like other industry players, Ameriprise expects to “narrow the offering,” while helping advisors “meet the rules duties of prudence and loyalty.”

Ameriprise-branded reps have some $476 billion in client assets as of Sept. 30. In the third quarter, the company said it spent about $7 million for expenses related to the new Department of Labor fiduciary standard.

--- Related on ThinkAdvisor:

Reprints Discuss this story
We welcome your thoughts. Please allow time for your contribution to be approved and posted. Thank you.

Related

DOL Rule Casualty: Commonwealth Drops Commission Retirement Products

Indie BD says the decision was “challenging,” though it makes less than 10% of revenue from commissions on these accounts.

Most Recent Videos

Video Library ››