Merrill Lynch cuts its top rate on fee accounts

Reduction from 2.7% to 2.2% could save smaller clients $5,000 a year.

Merrill Lynch has lowered its top charge on fee-based accounts to 2.2% from 2.7%, a move that could save smaller investors as much as $5,000 a year, The Wall Street Journal reports.

The reduction affects clients with under $1 million in assets at the firm. Those clients with $1 million to $4.9 million in assets will continue to pay a maximum of 2.2%, while investors with $5 million or more in assets will continue to pay a top rate of 2%.

Last year, Merrill began a process of changing its brokerage accounts, making its fee structure more transparent and, in some cases, less expensive, the Journal story said.

As a result of its decision last October to stop accepting commissions in retirement accounts, Merrill customers with such accounts soon will be required to choose between moving their IRA to a fee-based account or to a commission account at the firm’s online Merrill Edge unit.