A new policy at Bank of America Merrill Lynch means no more free golf games and muchfewer fancy meals hosted by asset managers or other product makers for its17,888 advisors.
“We’re enhancing our policies around
engaging with third-party product and
service providers with respect to gifts,
meals and entertainment,” the firm said
in a statement. “These changes further
ensure business interactions with third
parties continue to be in the best inter-
est of our clients.”
The new policies state that advisors
must pay for their own meals and other
entertainment at non-educational events.
They are, though, allowed free meals at
third-party events tied to “approved edu-
cational training or seminar programs.”
“@Titleist stock definitely going to
take a hit,” quipped industry consultant
Gavin Spitzner on Twitter, referring to the
golf equipment maker. “And on the enter-
taining kibosh, good timing since there
are no events to take advisors to anyhow.”
Under the new rules, asset managers
and other third parties can no longer
fund entertainment for Merrill Lynch
employees, and any meals provided by
asset managers must be associated with
Earlier, Merrill Lynch advisors couldenjoy up to $300 of food and entertainment at an outside event and up to$1,000 a year of such freebies. Now, theyhave to pay their own way, except forfood shared at events specifically tied tocontinuing education or other training.
As for gifts like golf supplies or wine,advisors used to be able to receive up to$100 in unbranded goodies. Now, theycan only accept items that include thebrand of the third party and are valuedat under $50. Plus, the gift giving “maynot be frequent or excessive,” accordingto the new policies.
Meanwhile, Wells Fargo Advisorssays it allows advisors to accept mealsfrom vendors “as part of the businessentertainment policy. The meal does nothave to be tied to an educational meeting,” according to a statement.
This means that vendors can sendfresh meals to advisors ahead of all Zoom-based and other virtual meetings; theWells Fargo reps must consume this foodand drink during the online event. Thepolicy conforms with recent guidancefrom the Financial Industry RegulatoryAuthority tied to virtual events.
According to FINRA Rule 3220, “The
provisions permitting business enter-
tainment do not specify whether the
entertainment must be in-person.”
The group explains that, when “a
member firm’s associated persons per-
sonally host an interactive virtual busi-
ness entertainment event or meeting,
FINRA would view the associated per-
sons’ provision of reasonable amounts
of food and beverage designed to be
consumed by the recipient employees
and their guests during that virtual busi-
ness entertainment or meeting as not
being subject to the $100 gift limit,
provided that the cost of the food and
beverage as well as the frequency with
which it is provided do not raise ques-
tions of propriety.”
It adds: “The provision of food and
beverage must not be preconditioned on
achieving a sales target.”
Wells Fargo also permits its advisors
to send fresh meals to their investor cli-
ents during scheduled online meetings
at lunch or dinner.
In the second quarter of 2020, thebank’s employee advisor headcountdropped to 13,298 from 13,450 as ofMarch 31 and from 13,723 a year ago.
Merrill Limits Third-Party Freebies;
LPL Pledges $1B for Growth Plans
The wirehouse says advisors can’t accept free golf games or many meals
from vendors; meanwhile, LPL wants its business to work more like
Amazon, Netflix and eBay.