By Laura J. Keller and Hugh Son
(Bloomberg) --Bank of America Corp., which has said it will stop offering commission-based retirement accounts as it prepares for new regulations, also plans to more clearly disclose fees that clients pay to the firm’s 14,000 financial advisers.
The Merrill Lynch business will break out fees for asset management services and products including mutual funds, alternative investments and commodities when it mails January account statements later this week. Such fees previously were embedded in statements in ways that customers found hard to understand.
Clients are likely to be more satisfied with “better fee transparency,” Susan McCabe, a company spokeswoman, said in a statement. “The enhancements are being made based on what our clients are telling us they’d like to see.”
Dominant U.S. brokerages, under pressure to justify costs as cheaper digital competitors make inroads, are moving ahead with client-friendly changes despite uncertainty over whether planned federal rules for best practices will be implemented. The Department of Labor’s fiduciary rule, which requires advisers handling retirement accounts to charge reasonable fees and commit to giving advice in a client’s best interest, may be delayed, revised or scuttled under the Trump administration.
Morgan Stanley told advisers last week it’s still enacting many of the pricing and product changes it planned last year, such as lowering stock commissions and reducing potential conflicts of interest with outside managers. The Labor Department regulation is scheduled to take effect in April.
At Bank of America, the new disclosures are among the first public changes enacted under Andy Sieg, 49, who succeeded John Thiel as head of the Merrill Lynch wealth-management business at the start of the year.
The firm has been working toward a higher standard of care for clients over the past several years, Sieg said in a statement. Last year, the Charlotte, North Carolina-based bank said it would no longer offer retirement accounts paid for with trade commissions because of Labor Department regulations. Instead, it’s favoring accounts that charge fees based on a percentage of assets.
“We are focused on what our clients want from us in regard to their retirement accounts: that is to act in their best interest and minimize conflicts,” Sieg said.
To contact the reporters on this story: Laura J. Keller in New York at [email protected]; Hugh Son in New York at [email protected] To contact the editors responsible for this story: Peter Eichenbaum at [email protected] David Scheer