Ameriprise Financial Services Inc. is the latest major brokerage firm to slash the number of investment products its brokers can sell as the industry counts down to Friday, when the Department of Labor's fiduciary rule takes effect.
On Monday, Ameriprise sent a list to its advisers of the more than 1,500 funds that it is cutting. The firm has more than 2,000 different funds available for advisers to recommend or sell to clients.
Investments not meeting the firm's due diligence standards at Ameriprise include mutual funds, exchange traded funds, exchange traded notes and closed end funds, according to the list. The reasons for dumping them range from performance to cost to the amount of assets.
"We are further enhancing our robust due diligence standards to ensure our clients and advisers continue to have access to a broad, quality investment portfolio to achieve their goals," wrote Ameriprise spokeswoman Kathleen McClung in an email to InvestmentNews. "We continue to offer thousands of funds from hundreds of firms."
Broker-dealers are culling their investment platforms or altering compensation to brokers in anticipation of the fiduciary rule, looking to eliminate any conflicts of interest that could arise when a broker sells a product. UBS Wealth Management Americas last week told its 7,000 financial advisers that their compensation from clients' retirement assets will change. The shift will be to asset-based compensation for UBS advisers and will apply only to retirement accounts.
Wells Fargo Advisors in May said it was putting new limits on mutual fund share classes and types of securities advisers can sell or recommend in a client's retirement account. Starting this month, Wells Fargo Advisors will require all new mutual fund purchases in brokerage retirement accounts to be executed in Class T shares.