Straus is critical of decisions by some firms to eliminate commissioned products in IRAs, which will eliminate the ability to put, for example, alternative investments into a tax-sheltered account.

“Big advisors are the ones absolutely hurt the most” with those policies, he said. “Wealthy clients don’t want to hear their advisor say, ‘We don’t do that—we don’t want to do the [BICE] paperwork.’”

But several firms that have announced a phase-out of commission business in IRAs say the impact on advisors will be minimal.

Merrill Lynch’s decision to end commission business in IRAs will impact less than 10 percent of the firm’s $2 trillion in assets, said Paul Donofrio, CFO of Bank of America.
As far as advisor movement, “we don’t expect significant attrition” from the change, Donofrio told analysts in October.

Merrill Lynch spokesperson Susan McCabe declined further comment.

Mark Albers, president of Albers & Associates, a recruiting and consulting firm, said he got calls from Merrill advisors after Morgan Stanley announced in October that it would—contrary to Merrill—allow commission business under the BICE.

The immediate reaction from Merrill reps was, “‘How come Morgan Stanley can do it and we can’t?’” Albers said. The change by Merrill “definitely has got a lot of people looking.”

That said, Albers notes that because many Merrill brokers have most of their assets on a fee platform anyway, most will deal with the change.

That’s what Wayne Bloom, chief executive of Commonwealth Financial Network, expects advisors at his firm to do. Commonwealth, like Merrill, will not be supporting commission business in IRAs under the DOL rule.

“In all the conversations I’ve had, advisors have been OK” with the policy, Bloom said.
“We have fee-based landing spots for all products,” he added.