Capital One has become the latest bank to announce that it will do away with commission-based retirement accounts in an effort to comply with the fiduciary rule.
It will eliminate commissions by April 10, the date that the rule becomes effective, the bank said in an announcement on Wednesday.
Capital One offered few details about what types of accounts will be available to customers in place of commission-based accounts, saying only that "it will move to a level-fee pricing model."
"We're focused on building a business that puts our clients' interests first, and embracing commission-free retirement accounts was a natural decision for us," Yvette Butler, president of Capital One Investing, the bank's retail brokerage arm, said in a statement.
The bank's decision comes one week after JPMorgan Chase announced similar plans. JPMorgan said customers will be able to receive advice through a fee-based managed account or transition to a self-directed account without advice.
Capital One will stick to its plan, it says, even if the fiduciary rule is eventually scrapped, as might be the case when president-elect Trump takes office.
Like JPMorgan, Capital One says its decision to abandon commission-based retirement accounts aligns with the fiduciary rule's goal of putting clients' interests first. "We're committed to providing today's investors a goals-based investment planning experience, while striving to take an open and transparent approach to pricing and empowering investors to plan for the future on their terms," Butler said in a statement.
In its announcement, Capital One touted its embrace of "commission-free" retirement accounts and its commitment to "unbiased investment advice."
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Other wealth management firms, such as Raymond James, Morgan Stanley and Ameriprise, came to different conclusions, opting to preserve commission-based accounts by using the best interest contract exemption. These firms are positioning themselves as offering customers more choices.
Capital One Investing offers both advised and self-directed digital accounts. In June, it launched an automated advice platform for clients with $25,000 to invest.
