The government’s new “fiduciary rule” for retirement investments won’t kill off commission-based accounts, at least not at Edward Jones, which on Wednesday became one of the first big brokerages to detail how it will deal with the new rule.
The rule takes effect in April. It is an effort by the Obama administration to limit conflicts of interest that can result in poor advice to clients and requires brokers to act in the best interest of their clients when dealing with individual retirement accounts, 401(k) advice, annuities and other retirement assets.
Under the new rule, Edward Jones clients with more than $100,000 invested for retirement can keep paying commissions for every trade of stocks and bonds, and the purchase of variable annuities. They can also go commission-free and pay a level fee based on their account size.
Commission accounts that existed before April of this year will be grandfathered. They can continue to pay trading commissions as long as no new money is placed in the account.
Clients with less than $100,000 will be put into fee-based accounts. The company will stop accepting retirement accounts of less than $5,000.
Read more: St. Louis Post-Dispatch