I have been, and remain, of the position that the BICE provision is nothing but liability and a contributor to fee compression. The same issue gave rise to the advice that standard payout grids must slope gently with many steps and retroactivity be very limited. If as a firm you offer a BICE, you must be scrupulous to ensure there is no form of incentive compensation that might create an additional possibility of “fiduciary conflict,” so you should not offer any “back-end” structures. The back-end bonus portion is the item at issue. Within another few hours, all firms had followed suit. Within minutes of their release, Morgan Stanley had an all-hands-on-deck call with field managers to rescind deals and restructure them to be compliant with the DOL’s guidance.
To BICE or Not to Bice? With deep apologies to William Shakespeare, this is the most pressing question of the day in light of the now notorious FAQs the DOL released two weeks ago. Morgan Stanley encouraged us to share this memo to brokers asserting customers’ “overwhelming positive reaction” to the firm’s alleged pro-choice decision on the issue.īelow we present an unsolicited defense of Merrill’s strategy from a headhunter and longtime field manager who assertively warns that the legal consequences of sticking with commissions, as allowed under the Department of Labor’s Best Interest Contract Exemption (BICE) can be devastating.
#TORRENT NOTECASE PRO TORRENT#
Editor’s Note: Our editorial on the competitive implications of Merrill Lynch’s unilateral decision to end commissions in retirement accounts created a torrent of response, some shared in the story’s comment section, and some in longer missives.
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