NEW YORK May 11 Bank of America Corp's
brokerage, Merrill Lynch, said on Thursday it will roll out a
commissions-paying retirement account compatible with a new U.S.
Labor Department regulation that raises the standards for client
The new limited-purpose brokerage IRA, which will launch on
June 12, days after the start of the new Labor Department rule,
will initially accept only cash and bank deposits. But the firm
will later allow clients to have access to money funds, brokered
CDs and concentrated stock positions, according to a memo
Merrill Lynch sent to advisers, which was seen by Reuters.
The fiduciary rule, which is set to take effect on June 9,
requires that brokers offering retirement investment advice put
clients' interests ahead of their own.
In cases where the broker is paid a commission for selling
certain investment products, under the new rule he or she must
disclose that information using something called a best interest
Merrill Lynch brokers whose clients chose these
limited-purpose IRAs will be presented with this type of
Last year, Merrill Lynch broke from its Wall Street
brokerage peers in declaring it would move the bulk of its
retirement clients out of traditional IRAs in response to the
new rule and into accounts that charge a simpler fee based on
But in the memo sent to brokers on Thursday, Merrill Lynch
head Andy Sieg wrote that the firm recognizes that in a limited
number of situations, a fee-based account may not be in the
client's best interest. This new IRA is meant to provide an
alternative for those clients.
"Today, we are announcing where we can offer more
flexibility in a manner consistent with a higher standard of
care," Sieg wrote.
(Reporting by Elizabeth Dilts; Editing by Matthew Lewis)