NEW YORK (Reuters) - JPMorgan Chase & Co (NYSE:JPM) has sent some wealth management customers letters this month notifying them that they could be moved to the firm's self-directed platform soon ahead of a pending Labor Department retirement regulation, the bank said on Monday.
While implementation of the U.S. Labor Department's fiduciary rule may ultimately be delayed, the letters went out as part of a plan the bank announced in November to end retirement accounts that pay financial advisers commissions.
Clients of Chase Wealth Management, Private Bank and J.P. Morgan Securities who had individual retirement accounts were given the option to either choose to pay a financial adviser a flat fee based on how much money they have invested, or an online platform to manage their retirement account themselves.
The move only affected a small portion of J.P. Morgan's clients because only 5 percent of the $1.1 trillion in client assets managed at J.P. Morgan Wealth Management & Investment Solutions are in retirement accounts. However, some clients had not yet responded with an answer as to which option they wanted.
Clients who had not chosen one received the letters in early March notifying them that by April 7 they may be moved to the self-directed platform unless they respond with another preference. The letter also included a condition that if the Labor Department rule is delayed the bank, may not move all of these accounts.
"We wanted to make sure we gave clients ample opportunity to decide which option they preferred," said JPMorgan Chase spokesman Darin Oduyoye, adding that the bank has invested in building out its online self-directed services.
Last September, the bank announced it had bought a stake in InvestCloud, a software company that it will use to customize its website and mobile apps for its wide-ranging client base.
The fiduciary rule aims to put the interests of retirement investors first by eliminating potential conflicts of interest for advisers, such as investments that pay different levels of commissions.
As a result, JPMorgan, Bank of America's Merrill Lynch and Commonwealth Financial Network, among others, have chosen to gradually phase out retirement accounts that pay commissions.