JPMorgan Chase & Co. has sent some wealth management customers letters this month notifying them that they will be moved to the firm's self-directed platform soon ahead of a pending Labor Department retirement regulation, the bank said on Monday.
While implementation of the U.S. Labor Department's fiduciary rule may ultimately be delayed, the letters went out as part of a plan the bank announced in November to end retirement accounts that pay financial advisors commissions.
Clients of Chase Wealth Management, Private Bank and J.P. Morgan Securities who had individual retirement accounts were given the option to either chose to pay a financial advisor a flat fee based on how much money they have invested, or an online platform to manage their retirement account themselves.
The move only affected a small portion of J.P. Morgan's clients because only 5 percent of the $1.1 trillion in client assets managed at J.P. Morgan Wealth Management & Investment Solutions are in retirement accounts. However, some clients had not yet responded with an answer as to which option they wanted.
Clients who had not chosen one received the letters in early March to notify them that by April 7 they will be moved to the self-directed platform unless they respond with another preference.
"We wanted to make sure we gave client ample opportunity to decide which option they preferred," said JPMorgan Chase spokesman Darin Oduyoye.
The fiduciary rule aims to put the interests of retirement investors first by eliminating potential conflicts of interest for advisors, such as investments that pay different levels of commissions.
As a result, JPMorgan, Bank of America's Merrill Lynch and Commonwealth Financial Network, among others, have chosen to gradually phase out retirement accounts that pay commissions.
This article was provided by Reuters.