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Rating:Sorry, Load Funds; Merrill Accelerates Its DoL Shift Not Rated 0.0 Email Routing List Email & Route  Print Print
Tuesday, November 8, 2016

Sorry, Load Funds; Merrill Accelerates Its DoL Shift

News summary by MFWire's editors

Last week, Merrill Lynch stopped offering mutual funds in IRA brokerage accounts.

Frank McDonnell
Merrill Lynch
Director, Head of Global Mutual Funds
This comes as a follow-up to the announcement early last month that it will drop commission-based IRAs entirely once the DoL's ruling goes into effect in April 2017, which MFWire's sister publication, 401kWire, reported on. The halting of mutual fund purchases will go into effect immediately, and is meant to prevent against clients being charged double commission on any mutual fund purchases made through IRA brokerage accounts between now and April. Mutual funds will still be offered through taxable brokerage accounts, Merrill Lynch's Investment Advisory Program and Merrill Edge.

In a statement, the B-D explained, "We recognize that recommendations by advisors to purchase mutual funds within brokerage retirement accounts between now and April 10, 2017 could create a conflict of interest whereby the client would be charged a commission for the purchase of the mutual fund, and when later enrolled in our IAP they would be charged an additional fee on that same mutual fund that had been purchased prior to April 10."

Several broker-dealers have come forward with announcements regarding compliance strategy, and they differ across the board. In August, Edward Jones announced that it would no longer offer mutual funds and ETFs through commission-based IRAs. On the flip side, Cambridge Investment Research and Cetera Financial Group are two of the most recent firms to announce that they will continue to allow advisors to charge both fees and commissions.

Tuesday's announcement was covered by the Wall Street Journal, InvestmentNews, ThinkAdvisor and Financial Advisor IQ

Edited by: Katy Golvala

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