The President of the United States, Donald Trump had issued an order last month. The order pertains to the labor department to delay all the operations that are concerned with the rules of the retirement savings that were proposed. A unit of the Bank of America, Merrill Lynch has decided that it will not get rid entirely with its retirement accounts that are based on commission.
On Thursday, the bank called for a conference with all its advisors. Merrill Lynch said that it has plans to convert most of the retirement savers to the accounts that will be charging a fee, which will be based on the percentage of the assets. The assets taken into consideration will be from those accounts that will be charging a commission. This information was received from a source that is actively involved in this matter.
However, a memo was observed by Reuters that shed light on some valuable information in this context. The memo was noted by the head of the department of Wealth Management of the Merrill Lynch bank, Andy Sieg. The contents of this memo said that these conversions in the accounts might not be applicable to all those customers who hold an account in this bank.
In addition to this, the memo by Andy Sieg stated that Merrill Lynch has analyzed and understood that the best interest of any client that will lie in the arrangement based on the fee provided in limited situations only. The bank is considering all measures necessary to review and comprehend these limited circumstances so that other potential alternatives can be considered. These alternatives will be helpful in the IAP for many clients and will ensure the implementation in a consistent manner along with care, which will be of the highest standards.
During the presidency of the former president, Barack Obama, a new fiduciary rule was proposed, which has to be implemented from the month of April; however, Donald Trump in the previous month had ordered the Department of Labor to review the dates of its implementation.
Many financial services industries staunchly opposed this new rule. According to the Wall Street, if this new rule was implemented, it would provide harm and cause damage to the consumers because the costs of compliances and the fees will shoot up. This will make them to avoid the clients in the Main Street and also negate the small businesses and offer 401(k) plans.
The Wall Street Journal had also reported that Merrill Lynch was initiating plans to continue the offerings of the retirement accounts that were based on commission.