Less than a month after telling its advisors that it would not offer new advised, or commission-based, brokerage retirement accounts starting in April 2017, Bank of America-Merrill Lynch (BAC) says effective immediately purchases of mutual funds in existing IRA accounts are no longer allowed.
Mutual funds can be bought in Merrill Lynch Investment Advisory Program accounts and non-retirement brokerage accounts.
For advisors, the shift means that commissions tied to mutual-fund sales in brokerage retirement accounts will no longer be part of their compensation plans.
“Decisions made regarding the DOL fiduciary rule are grounded in our strategy to provide best interest, goals-based advice to our retirement clients while preserving client choice. They also reflect our goal of ensuring that our advisors and our firm are best positioned to comply with the rule,” the wirehouse broker-dealer said in a statement.
The move – explained in a memo written by Frank McDonnell, head of Global Mutual Funds, and shared with advisors Tuesday – aimed to get Merrill Lynch’s “Thundering Herd” ahead of the regulatory curve.
“We are implementing this decision in advance of the DOL rule’s applicability date, to ensure as seamless and positive experience for our clients and advisors as possible,” the firm explained.