As Wall Street’s wealth management firms scramble to comply with a new U.S. Department of Labor rule, JPMorgan Chase & Co said on Wednesday it will stop offering commissions-paying retirement accounts.
In doing so, J.P. Morgan will join Bank of America’s Merrill Lynch and other firms that recently adopted the approach.
The so-called fiduciary rule, which takes effect in April, is aimed at forcing brokerages to put their clients’ interests first by eliminating any conflict of interest created by brokers’ commissions.
The rule targets “transactional” accounts, which charge clients a commission for every trade, and rather than wade through the complexities of the 1,000-plus page regulation, many firms are just dropping transactional retirement accounts altogether.
Starting in April, clients of Chase Wealth Management, Private Bank and J.P. Morgan Securities have two options: they can either chose to pay a financial adviser a flat fee based on how much money they have invested, or they can use an online platform to manage their retirement account themselves.