Joining the league of other broker-dealers mulling changes to their businesses in light of the Department of Labor’s fiduciary rule, Merrill Lynch said Thursday that beginning in April, the company will cease offering new advised, or commission-based, brokerage IRA accounts.
Merrill plans to encourage its retirement clients to consult with their advisor about whether to move their brokerage IRA accounts to Merrill Lynch One, the BD’s Investment Advisory Program that offers a single, asset-based fee schedule, if they would like to continue to receive investment advice.
Merrill Lynch One, the firm said, helps Merrill to “improve the client experience and to provide increased transparency into fees, risks and outcomes,” adding that another alternative for investors is the brokerage’s self-directed and guided investing channels offered via Merrill Edge.
On Wednesday, BofA Merrill said that Merrill Edge, which was started about six years ago and now has over $130 billion in client assets, plans to introduce a robo-advice offering later this year.
“Our path ahead is to offer goals-based advice, supported by our Chief Investment Office, and delivered by highly-trained teams of professional advisors,” Merrill said in its statement.
Merrill also explained that “legacy retirement assets,” which are those in a Merrill Lynch IRA brokerage account before April 10, 2017, “can remain in that account, and will continue to have the benefit of our investment recommendations to hold or sell” after April 10, which is when the DOL’s first compliance date kicks in.
This is not likely to be the last of company changes as agents, advisors and their employers prepare for the compliance demands of the new federal fiduciary standard. (Photo: iStock)