Death of DOL’s Fiduciary Rule in March Leads to Merrill Lynch Policy Change
According to reports this week, Merrill Lynch said on Thursday it is reintroducing commissions for its retirement accounts, reversing a policy put in place to comply with Pre-Trump Fiduciary Rule regulation.
Last June, Merrill Lynch, along with JPMorgan Chase & Co, reportedly banned brokerage retirement accounts and began moving clients into advisory accounts to prepare for the U.S. Department of Labor’s fiduciary rule meant to protect investors from commission-seeking financial advisors.
The 5th U.S. Circuit Court of Appeals overturned the fiduciary rule in March. At that time, Merrill executives reportedly said the firm would keep the policy in place to serve the best interests of its clients.
The company is now reversing that policy and expects to add a brokerage option back to individual retirement accounts by Oct. 1.
The U.S. Securities and Exchange Commission recently proposed a replacement rule that would require brokers to act in the best interest of clients when making investment recommendations for all types of accounts.
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Brokers have a fiduciary duty to make investment recommendations that are consistent with the client’s net worth, investment experience and objectives.
When brokers abuse client accounts and conduct transactions that violate securities laws, the brokerage firm they are working with may be liable for investment losses. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
FINRA is an independent, non-governmental regulator for all securities firms doing business with the public in the United States. Their mission is to protect investors by regulating brokers and brokerage firms and monitoring trading on U.S. stock markets.
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Tags: FINRA Regulation, Merrill Lynch commissions, Merrill Lynch fiduciary rule, Merrill Lynch FINRA, merrill lynch lawsuit, Merrill Lynch losses Last modified: September 4, 2018
