The firm moved to charging fees as a percentage of client assets, versus charging commissions on individual trades. That meant customers who wanted to be able to trade in their retirement accounts at the brokerage had to move to a fee-based account or find another brokerage that still offered commission-based trading, as many Merrill rivals still did.
For accounts that don’t have a lot of trading activity, commission-based models can be less expensive.
On Thursday, announcing the about-face, Andy Sieg, who heads of Bank of America’s Merrill Lynch Wealth Management division, said, “In response to client feedback, we’re announcing steps today that will provide our clients with greater choice and flexibility, while maintaining our support for a Best Interest standard for investment advice across all accounts.”
In a memo, the firm said the primary way customers will continue to get advice is through its Merrill Lynch Investment Advisory Program, the model that charges fees as a percentage of customer assets.