Merrill Lynch drops the commission model on IRAs

Wall Street Journal:

The Bank of America Corp. brokerage unit told its more than 14,000 brokers on Thursday that after April 10, when the new rules take effect, investors who want a retirement account at Merrill will need to pay a fee based on a percentage of their assets, instead of having the option of being charged for each transaction made in their account.

The announced move, coming six months since the unveiling of the Obama administration’s fiduciary rule requiring brokers to put the interests of retirement savers ahead of their own, is roiling firms across the investing world as they look to comply and even capitalize on the changes. The rule is expected to affect about $3 trillion of client assets in the U.S., according to researcher Morningstar Inc.

At heart is the elimination of incentives that might cause brokers to give conflicted advice. Clients in fee-based accounts are charged a level fee based on a percentage of their assets, minimizing potential conflicts tied to specific investment products, observers said.

A lot of the predictions I had made about the industry’s direction in my 2012 book, Backstage Wall Street, are now coming to pass. This is the first announcement of hundreds we will see as the brokerage industry throws in the towel on conflicted retail business and wholly embraces the Fiduciary rule – not just in letter, but in spirit.

This is not a matter of preference anymore, it is a matter of survival. RIAs have now taken more than a quarter of the wealth management business by market share. The consumers, and forward-thinking advisors, have already voted with their feet and with their assets. The DOL rule is just an accelerant on an already burning bonfire.

I’ll have more to say on this later.


Merrill Lynch to End Commission-Based Options for Retirement Savers (WSJ)

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.

What's been said:

Discussions found on the web
  1. Immediate Edge Review commented on Sep 21

    … [Trackback]

    […] Find More Information here on that Topic: […]

  2. commented on Oct 19

    … [Trackback]

    […] Read More to that Topic: […]

  3. quality engineering commented on Nov 11

    … [Trackback]

    […] Find More to that Topic: […]

  4. disposable virus sampling swab kit commented on Dec 01

    … [Trackback]

    […] There you can find 75362 more Info to that Topic: […]

  5. Security as Code commented on Dec 02

    … [Trackback]

    […] Find More to that Topic: […]

  6. CICD commented on Feb 07

    … [Trackback]

    […] Info on that Topic: […]