In a conciliatory move to appease brokers and clients, Merrill Lynch told its “Thundering Herd” it would relax its wholesale move to fee accounts for retirement accounts. But the new commission-based individual retirement accounts come with a limited menu of offerings, likely tamping down interest.
Merrill opted to loosen its stance after brokers and clients alike expressed concerns with the firm’s one-size-fits-all approach to paying for retirement advice, people familiar with the matter told WSJ Wealth Adviser.
But the new commission-based IRAs, set to launch June 12 just days after the fiduciary rule takes effect, will only be able to house money funds, brokered certificates of deposit and concentrated stock positions, the people said. Clients with $50 million or more with the brokerage will also be able to invest in private-equity and hedge funds.
Without stocks, bonds, mutual funds and other products available, those commission-based accounts are likely to be unattractive to most Merrill clients affected by its fiduciary rule changes, brokers there said, meaning most clients will either wind up in fee-based accounts or on Merrill Edge, Bank of America’s online brokerage service.
Still, some brokers welcomed the additional flexibility since it will help them accommodate clients in special situations, such as executives who have concentrated stock positions.
Below, some of the best analysis and insight from WSJ writers and columnists, and occasionally beyond, on investing, the wealth-management business and more.
TALKING POINTS
Unleashing banks. The nation’s main national bank regulator could act on its own to give banks relief from the Volcker rule trading ban, the agency’s acting chief said in his first interview since taking the job.
Snapchat sours. The under-30 crowd, Snapchat’s biggest users, were initially hot on the stock when it debuted on the public markets in early March. But, judging by brokerage data and social media platforms, that enthusiasm appears to have cooled a bit.
Thursday’s markets. U.S. stock indexes pulled back. The Dow Jones Industrial Average fell 24 points, or 0.1%, to 20919 on Thursday. The S&P 500 lost 0.2%, and the Nasdaq Composite shed 0.2%.
PLANNING AND INVESTING
Market anomalies. Tie together an algorithm, an exchange-traded fund and an academic study finding an anomaly in the markets, and voilà! You have a formula for making money. Trouble is, it turns out that most of the supposed anomalies academics have identified don’t exist, or are too small to matter.
Bond yields. Global bonds have been roiled by improving growth prospects, but in one of the riskiest parts of the market, junk-rated credit, yields are still falling to all-time lows. In Europe, yields on junk-rated bonds hit their lowest level on record this week. U.S. high yield is also outperforming other bonds, with yields falling toward the lows reached in mid-2014.
Watching Your Wealth podcast. WSJ Wealth Adviser’s Michael Wursthorn talks about why figuring out how to pay your financial adviser can be so confusing, and breaks down exactly how much your adviser should ultimately get.
Subscribe to the Watching Your Wealth podcast at wsj.com or on iTunes. And find the full archives of Watching Your Wealth here.
BUSINESS AND PRACTICE
Adviser Voices. Preston McSwain, founder and a managing partner of Fiduciary Wealth Partners in Boston, says clients should understand investing as a tool that helps achieve specific personal goals.
TRAVEL AND LIFESTYLE
Foreign property pitfalls. There are steep risks involved in buying luxury property in an unfamiliar country. For many the plan works beautifully. But in cases where developments stall, deposits evaporate or contractors disappear, some buyers find themselves in legal or financial straits that they lack the local knowledge and contacts to unravel.
ADVISER CALENDAR
– Advicent Innovation Summit / New York, May 18
– NAPFA Spring National Conference / Bellevue, Wash., May 16-19
– Fi360 Conference / Nashville, Tenn., May 21-23
– CFA Institute’s 70th Annual Conference / Philadelphia, May 21-24
– FPA NorCalConference / San Francisco, May 30-31
– AICPA Engage 2017 / Las Vegas, June 12-15
– FPA NexGen Gathering / Chicago, June 23-25
– In|Vest 2017 / New York, July 11-12
– RIIA Summer Conference 2017 / Salem, Mass., July 17-18
– XYPN17 And FinTech Competition / Dallas, Aug. 28-31
– Insider’s Forum 2017 / Nashville, Tenn., Sept. 6-8
– APFA Financial Advisor Boot Camp / Los Angeles, Oct. 5-6
– ADISA 2017 Annual Conference / Las Vegas, Oct. 23-25
– IMCA Private Wealth Advisor (PWA) 2017 / Chicago, Oct. 16-17
– FPA Minnesota 2017 Annual Symposium / Minneapolis, Oct. 16-17
– FinCon 2017 / Dallas, Oct. 25-28
– The SRI Conference / San Diego, Nov. 1-3
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The Wealth Adviser briefing covers topics of special interest to wealth managers, financial planners and other advisers. It’s delivered to subscribers by email each workday morning; you can sign up for email delivery here: http://on.wsj.com/WealthAdviserSignup. Please send tips, suggestions or other comments to michael.wursthorn@wsj.com or Wealth Editor Brian Hershberg at brian.hershberg@wsj.com.
Follow WSJ Wealth Adviser on Twitter: @WSJadviser
May 12, 2017 at 02:54PM
from Michael Wursthorn
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