Clients of Bank of America’s Merrill Lynch brokerage can no longer buy mutual funds in retirement accounts that charge commissions, another sign that the effects of new retirement regulations are already being felt months ahead of implementation, the Wall Street Journal reported today. Starting immediately, Merrill clients who have a commission-based individual retirement account can no longer purchase a mutual fund, according to a memo sent to the firm’s more than 14,000 brokers. Merrill clients who already have mutual funds in a commission-based IRA won’t be forced to sell and can continue to make dividend reinvestments. However, after April 10 — when the new retirement rules begin to take effect — clients won’t be able to add or make changes to their mutual-fund positions or make new purchases. The move follows Merrill’s decision in October to no longer offer commission-based IRAs to retirement savers after April in an effort to comply with the Labor Department’s fiduciary rule requiring brokers to put the interests of retirement savers first. Instead, Merrill will offer only IRAs that charge a fee based on a percentage of assets or the option of moving the account to online brokerage Merrill Edge, where clients can direct their own investments, choose a cheaper fee-based account or use its soon-to-launch robo-adviser service.
