Morgan Stanley to move ahead with changes despite uncertainty around DOL fiduciary rule

Morgan Stanley, one of the biggest U.S. brokerages, said it plans to move ahead with client-friendly changes designed to comply with federal rules despite uncertainty over whether the regulation will be implemented. “There has been a great deal of speculation about the future of the Department of Labor's fiduciary rule under the new administration,” including the possibility that it will be changed or scuttled, Shelley O'Connor and Andy Saperstein, who head the New York-based firm's wealth-management division, said Thursday in a memo to employees. The Labor Department regulation, scheduled to take effect in April, means that financial advisers handling retirement accounts must commit to giving advice in a client's best interest and charge reasonable compensation. President Donald Trump has called for scaling back regulatory bureaucracy that he sees as stifling economic growth and job creation. Anthony Scaramucci, one of the president's advisers, has fought against the fiduciary rule, saying it will raise costs for financial firms and their clients. Morgan Stanley will make “many” of the pricing and product design changes it planned last year, include lowering commissions for trades involving stocks and exchange-traded funds “to the benefit of our clients,” according to the memo. The firm will also seek to reduce potential conflicts of interest with third-party managers, trim redundant offerings and improve disclosures to customers. “With or without the rule, we fundamentally believe that serving our clients well and continuing to lead the industry forward require that we provide an increasingly higher standard of care for our clients,” according to the memo. In October, Morgan Stanley said it was keeping commission-based accounts to preserve choice for its customers, while Bank of America Corp. said it was adjusting to the fiduciary rule by ending brokerage retirement accounts.