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January 27, 2017 at 08:33 AM
As Donald Trump’s presidency has raised the possibility of delays and even a repeal of the Labor Department’s new fiduciary standard, Morgan Stanley is telling its 15,700-plus advisors that many of its planned changes will happen regardless.
The wirehouse has said its retirement account clients can work with commissions or fees in the future and that it will be lowering some charges for trades. Rival Merrill Lynch has said it plans to end commission-based retirement accounts.
“With or without the rule, we fundamentally believe that serving our clients well and continuing to lead the industry forward require that we provide an increasingly higher standard of care for our clients across both retirement and non-retirement assets. To that end, and regardless of any potential delay, we will continue to move ahead in three important areas in the coming months,” explained Shelley O’Connor and Andy Saperstein, co-heads of the wealth management unit in Thursday’s memo.
Morgan Stanley’s view echoes that of many independent broker-dealers, as expressed at Monday’s Financial Services Institute OneVoice 2017 conference in San Francisco. “There’s no going back,” Wayne Talleur, president of Madison Avenue Securities, said before a crowd of about 700 attendees at the conference’s opening sessions. “We’ve evolved more in the last 18 months than we have over our [entire] existence.”
“Even if [the DOL rule] is delayed, we have entered into the fiduciary era,” said Valerie Brown, executive chairwoman of the Advisor Group, which includes several independent broker-dealers with a total of 5,000 affiliated advisors.
DOL-Related Details
In terms of specific product design and pricing changes that Morgan Stanley told its advisors about in November, the firm says it will make “many” such adjustments, including those to equity and unit investment trust commissions.
It also intends to boost “quality standards” for third-party managers on its platform and to decrease the number of “redundant strategies.”
