AFTAs 2017: Best Compliance Initiative—Bank of America Merrill Lynch

2017 AFTAs

With the announcement of the Department of Labor’s (DOL) Fiduciary Rule, asset managers have been exploring how to meet their increased regulatory compliance needs. Bank of America Merrill Lynch (BAML), winner of this year’s best compliance initiative, was determined to build technology solutions to meet not just the new rule but also clients’ other needs. 

Jay Link, BAML’s head of fiduciary programs and platforms, says its compliance program to meet the fiduciary rule had to take a centralized approach.

“Enhancements to several of our wealth management technology platforms were needed to comply with the fiduciary rule, while also enabling our business strategy,” Link says. “Our technology approach included a centrally-coordinated effort to design, build and deploy changes across various distributed and mainframe applications, including both internal and external facing.” 

Link explains that the solutions had to be flexible, given the uncertainty around the date of the new rule. The bank’s advisor platforms and other applications had to be upgraded including its Investment Advisory Program (Merrill Lynch One) and the Merrill Edge Platform, Link says, but it was not just the platforms and how they were accessed that had to be improved—the retirement account enrollment process, supervision routines and supporting applications had to be redesigned for best-interest recommendations.

The bank also set up an end-to-end scheme so that advisors can better explain offerings, capture client information and enroll new clients into programs. 

Around a dozen different technology teams worked on enhancing the wealth and asset advisory platforms which took place over an 18-month period. The strategy covered eight software releases around different business lines. In crafting the solution, Link says each business line and internal departments had a voice in terms of how it can be implemented. 

The solution encompasses all aspects of the firm’s wealth management business, including its legal, compliance, risk, communications and marketing business lines, and technology partners. The ruling, announced in April 2016, was supposed to be fully implemented at the start of January 2018, but has since been pushed back to 2019.

Despite this, Link says the project is not on hold and will still be rolled out once the rule is fully implemented. “The delay pushes back the applicability date for full compliance with certain exemptions to the rule,” Link says. “However, the rule became applicable and, as of today, is still in effect regardless of the delay. Our strategy to help ensure a higher standard of care for clients does not change.” 

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