NEW YORK May 1 Morgan Stanley's wealth
management business said on Monday it is lowering the
commissions that brokers earn on stock trades, exchange-traded
funds and annuities amid pressure to lower costs for clients.
Commissions for brokers are now capped at 2.5 percent of a
trade, the investment news website AdvisorHub.com reported
earlier Monday. It is unclear if there was previously a limit on
Morgan Stanley spokeswoman Christine Jockle said that the
change, which also affects unit investment trusts, is intended
to "better align client costs" with brokerage services.
"Overall, these changes will lower client costs, in some
cases substantially," Jockle wrote in an emailed statement.
The wealth management industry has taken steps to level the
fees and commissions that brokers charge on investment products
like mutual funds throughout the past year in preparation for a
new U.S. Labor Department retirement regulation.
The Labor Department's fiduciary rule, which is set to take
effect on June 9, requires firms to eliminate any conflict of
interest, such as certain sales incentives, for brokers who are
advising clients on their retirement savings.
In March, Morgan Stanley eliminated commissions and finder's
fees for advisers who manage 401(k) plans, and started paying a
level fee to advisers handling those accounts, according to
(Reporting by Elizabeth Dilts; Editing by Lisa Shumaker)