(This version of the May 24 article, corrects headline and first sentence to reflect that Wells Fargo Advisors will begin offering the shares, but did not create them)
By Elizabeth Dilts
NEW YORK (Reuters) - Wells Fargo Advisors (WFC.N) will start offering a new share class of mutual funds next month as part of its plan to comply with the new U.S. Labor Department regulation that seeks to put the interests of retirement clients first, the bank confirmed Wednesday.
Starting June 9, the same day the DOL’s fiduciary rule takes effect, advisers who want to buy mutual fund class shares for clients’ retirement accounts will be required to buy T shares, which pay advisers a 2.5 percent commission upfront and a 0.25 percent going forward.
These shares differ from other mutual fund shares, such as A or C shares, because the flat commission and ongoing fee they charge eliminates any possible conflict of interest that could encourage an adviser to recommend one type of mutual fund over another for clients.
The DOL’s fiduciary rule requires brokers to put client’s interests first by avoiding investment products that could present a conflict of interest.
Wells Fargo Advisors spokeswoman Emily Acquisto said the firm is prepared for the June 9 start date of the new rule, and they continue to asses the firm’s financial planning strategy and tools “to ensure our clients have the best outcomes under the rule.”
Reporting by Elizabeth Dilts; Editing by Andrew Hay