Can Merrill Lynch, which oversaw $2.75 trillion in client money at the end of last year, really unring the bell on hidden fees[1] at America’s stock brokerages?
Just a few months ago, Merrill was trumpeting to the heavens a newfound commitment to putting its customers first.
They talked about it in the press and built a nice webpage to explain it. Here’s Merrill’s own words, just recently taken from that very site[2]:
“Our clients are the most important part of our business, so we put their goals at the center of the critical decisions we make each day. The Department of Labor rule requires all financial advisers to provide a fiduciary standard of care to client’s retirement accounts when providing investment advice. This means that your adviser acts in your best interest when providing investment advice.”
This sounds great. It’s exactly what most people think Merrill already does for them. But the fact that the Bank of America BAC, -1.02%[3] unit had to explain their philosophy is telling.
Simply put, before the fiduciary rule Merrill didn’t put the client first. Then the rule was enacted, so Merrill made the fiduciary standard of care company policy.
Now it appears Merrill is looking for a way out. The Wall Street Journal reports[4] that upper management is trying to figure out how to allow brokers to charge those fees once again.
What changed? Well, a court case halted the fiduciary rule, for one. Then the current administration declined to defend it.
So the rule — which required retirement advisers to put their clients’ interests ahead of their own — died on the vine.
Read: Is the fiduciary rule dead or alive? What its fate means to you[5]
Merrill is reported to be performing a 60-day review of its own policy, enacted two years ago. Here’s what Merrill told the press[6] after notifying their 14,000 financial advisers nationwide of a possible reversal on the fiduciary rule.
“Now that the regulatory environment has shifted, we’re taking a look at our policies, especially as they might affect policies and procedures for individual retirement accounts, to ensure we keep our clients’ best interests front and center. Our core strategy, consistent with our principles, remains unchanged,” the company said in a statement.
Read: Is your broker really on your side? SEC action might force hand of advisers[7]
Doublespeak
It’s a lovely bit of doublespeak, no doubt painstakingly written by some PR group with the compliance department looking on.
See if you can follow along. They’re looking at policies and procedures (that could mean anything) with regard to individual retirement accounts (bingo,...