Wells Fargo will offer clients commission-based retirement accounts under the fiduciary rule, according to a company memo sent to advisers, making it the latest firm to unveil plans for complying with the new regulation.

The policy applies to both employee and independent advisers, according to a company spokeswoman.

Several firms, including Morgan Stanley and Ameriprise, are opting to make use of the rule's best contract interest exemption, which permits commission-based business.

With more than 15,000 advisers, Wells Fargo is one of the largest firms to do so. Merrill Lynch, which has 14,000 advisers, has moved in the opposite direction, saying clients who want commission-based business can opt to use Merrill Edge, its self-directed platform, or its forthcoming robo adviser service.

"If a firm doesn't have something like Merrill Edge or an adviser base like that of Merrill's, then they might come to a different conclusion," Alois Pirker, research director at Aite Group, a Boston-based research firm, said last month.

Among the wirehouses, only UBS has not announced whether the firm will keep commission-based accounts.

Executives at many firms have expressed concern about an increased liability risk if they were to permit advisers to use the contract exemption. But, several industry analysts have noted that the rule is likely to pinch revenue streams for some firms, depending on their business model.

(Bloomberg News)
(Bloomberg News)

But even as wealth management firms have been detailing plans for complying with the rule, the presidential election has thrown the future of the Department of Labor's regulation into doubt. Republicans in Congress have expressed their desire to overturn the rule, and President-elect Donald Trump has indicated a desire to rollback Obama-era regulations. Wells Fargo acknowledged this uncertainty in its memo.

"While there is a great deal of speculation in the media on how the election results will affect the DoL rule, none of us can say with certainty what will actually happen. Many different types of scenarios are possible, and we are planning for all of them. In the meantime, we will continue preparing for an April 2017 implementation," the company said.

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A person familiar with the company's fiduciary planning confirms that executives are moving ahead as if the rule will go into effect. But even if the regulation is overturned next year, it may be wise to make adjustments to how the company does business given the momentum a fiduciary standard has had, the person says.

"I think we'll be living in a fiduciary world three to four years from now anyways," he says.

The firm said it was taking additional measures to comply with the rule, including more documentation of client risk tolerance and intention, as well as investment recommendations.

Wells Fargo will announce other changes in the coming weeks, according to the memo.

The firm may curtail the product range available in retirement accounts, offering clients "more pre-approved solutions," according to the source.

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