Merrill Lynch's John Thiel urges colleagues to work with DOL on fiduciary rule

Takes a more conciliatory approach on 'best interest' standard than industry trade groups

Apr 8, 2015 @ 2:12 pm

By Mason Braswell

At least one major industry player is taking a more welcoming stance toward working with the Labor Department as it seeks to create a rule that would hold brokers to a fiduciary standard when dealing with retirement plans.

Speaking on Wednesday at a conference for the Securities Industry and Financial Markets Association, an industry trade group that has been a vocal opponent of the DOL's fiduciary efforts, the head of Bank of America Merrill Lynch, John Thiel, advocated for working more collaboratively with the regulator on a rule.

“Since 2010, we have supported the notion of a consistent and higher standard for every professional that deals with the American investor and those that deal with retirement plans,” he told the roughly 200 industry executives gathered in Chicago for the conference. “As an organization, we have provided input to policymakers in Washington; we believe we were heard and we will have an additional opportunity to comment once the rule is open for comment.”

The view ran contrary to that of many brokerage and insurance trade groups, including SIFMA, the Financial Services Institute Inc.and the Insured Retirement Institute. They have strongly opposed a rule proposal from the DOL out of the concern that it may limit compensation for brokers who sell individual retirement accounts and possibly reduce the availability of advice for middle-income clients.

SIFMA has also argued that the SEC should be responsible for issuing any uniform fiduciary standard, not the DOL.

“The industry has a responsibility not just to respond, but also to lead, even if it means challenging our regulators, on a popular sounding but ultimately counter-productive notion,” SIFMA president Kenneth Bentsen said in his opening remarks at the conference.

A spokeswoman for SIFMA, Katrina Covalli, declined to comment on Mr. Thiel's speech.

Although Mr. Thiel did not reference the Labor Department by name, his comments refer to a rule proposal that will soon be open to comments.

Mr. Thiel's comments took a more flexible tone toward that proposal, implying that he and Merrill Lynch have been working constructively with the DOL on the proposal.

“As an industry we should work in a constructive and collaborative manner that's in the best interest of clients,” he said. “It's obviously the right thing to do.”

It could put pressure on other firms to take a similar approach as Merrill Lynch remains one of the largest firms under SIFMA's umbrella with more than 14,000 advisers and $2 trillion in assets.

“I thought [Mr. Thiel] was dead-on that we as an industry have to come to a conclusion on the fiduciary standard,” said Darryl Metzger, who leads the private-client group at Hilliard Lyons. “His comment is, if it comes from the DOL, they seem to be first and foremost with it and at least it would be clear and we can understand it.”

Asked after his speech why he didn't use the word “fiduciary” specifically, Mr. Thiel said that “best interest” was easier for investors to understand.

"Do I have to [say it]?” he asked rhetorically. "Do you think investors understand what that word means?"


What do you think?

View comments

Recommended for you

RIA Data Center

Use InvestmentNews' RIA Data Center to filter and find key information on over 1,400 fee-only registered investment advisory firms.

Rank RIAs by

Featured video


What can advisers learn from the first female fighter pilot?

Pressure is pressure. Whether you are taking off from an aircraft carrier or dealing with the unforgiving movements of the market, you need to have a plan. Carey Lohrenz, the world's first female F-14 pilot, has some advice for advisers.

Latest news & opinion

10 most affordable U.S. cities for renters

Here are the U.S. cities that are most affordable for renters, according to Business, which compared the cost of rent to average salaries.

9 best - new - financial adviser jokes

Scroll through for nine new financial adviser laughs.

Fidelity CEO says zero-fee funds aimed at expanding its universe

Johnson says way to prosper in financial services is 'by building relationships.'

SEC advice rule contains a huge hole

Jay Clayton aims to clear up investor confusion by drawing a distinction between brokers and advisers in the agency's proposed package of revised standards. But where do dual registrants fit?

9 signs it's time to fire your client

Here are signals that a client should be asked to leave, according to experienced financial advisers.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print