A Seismic Shift
On October 7, Merrill Lynch announced the end of commission based products in new retail retirement accounts, radically altering a retirement planning business central to the practices of some 14,000 advisors. After April 10, 2017, all new retirement accounts at Merrill Lynch will be fee-based rather than commission based, and existing accounts must be converted to the fee-based Merrill One platform (at reduced fees) or be frozen. Customers who have accounts that are frozen can retain commission-based retirement accounts, but they will not be able to buy or sell securities within them. The move came in response to the Department of Labor’s new ruling that redefines the meaning of the term “fiduciary” and sets in motion sweeping new changes in how retirement accounts are sold, serviced, and managed. The new ruling, which takes effect on April 10, 2017, extends ERISA protections to individual retirement products like IRAs.