Author Topic: Forced to Switch Accounts to Merrill Lynch after Marriage to Merrill Lynch Emp?  (Read 1243 times)

simonsez

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An acquaintance of mine told me recently that he has to switch all of his IRA and taxable accounts over to Merrill Lynch after he marries his fiancee, who works for Merrill Lynch.

Is this normal in the financial world?  Obviously it's not like Merrill Lynch can postpone the wedding (albeit a funny visual) but I wonder if there would be repercussions for her if he didn't move his accounts after their wedding.

I don't know her as well and she generally handles the retirement side for that household.  I wonder if this is true or if she is just saying this as an excuse to consolidate accounts and make it easier to track.  Anyone else relate to this?

It seems preposterous but then again, Merrill Lynch is under BoA so anything is possible.

acepedro45

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She isn't just saying this as an excuse. I am curious how widespread the practice is among other large financial institutions. Or what happens when a Merrill employee marries someone from another bank with a similar policy. Does the universe vanish because the paradox can't be resolved?

-Source: personal experience as the annoyed spouse of a Merrill employee who had to move a bunch of accounts.

oldmannickels

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Might have something to do with banking rules. Not sure what their jobs are but BoA may need to monitor/report their investments and trading activity for banking regulations. I have a spouse in public accounting and for independence regulations we have to use approved vendors for all investment brokerages and have to pre-approve any new investments.

simonsez

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She isn't just saying this as an excuse. I am curious how widespread the practice is among other large financial institutions. Or what happens when a Merrill employee marries someone from another bank with a similar policy. Does the universe vanish because the paradox can't be resolved?

-Source: personal experience as the annoyed spouse of a Merrill employee who had to move a bunch of accounts.
Wow! That is so interesting and bizarre.

I wonder if anyone has been fired as a lack of doing this or failing to disclose a marriage.  The policy has a slight dystopian feel to it.

ABC123

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What if they kept their finances completely separate?  Can ML force the non-employee to disclose all of their financial information even if the 2 haven't co-mingled their money?

ixtap

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What if they kept their finances completely separate?  Can ML force the non-employee to disclose all of their financial information even if the 2 haven't co-mingled their money?
An acquaintance of mine told me recently that he has to switch all of his IRA and taxable accounts over to Merrill Lynch after he marries his fiancee, who works for Merrill Lynch.

Is this normal in the financial world?  Obviously it's not like Merrill Lynch can postpone the wedding (albeit a funny visual) but I wonder if there would be repercussions for her if he didn't move his accounts after their wedding.

I don't know her as well and she generally handles the retirement side for that household.  I wonder if this is true or if she is just saying this as an excuse to consolidate accounts and make it easier to track.  Anyone else relate to this?

It seems preposterous but then again, Merrill Lynch is under BoA so anything is possible.

I thought it was usually the other way around for investment firms: there were limits as to what you can invest in, rather than requirements of where to put your money.

FIPurpose

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My spouse also used to work for an investment firm and they had rules about all brokerage accounts had to be through Charles schwabb and all stock purchases had to be approved ahead of time. They would also black list certain stocks a different times.

Since people at investment firms/Banks have access to private info and other people's trades, they want to make sure you're not doing insider trading. It can obviously reflect very badly on them if an employee is found to be doing illegal stock trading.

Cyanne

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When you work for a brokerage you are required to have your family's investment accounts with that firm so that compliance can monitor your account to make sure there isn't any inside trading. This is a FINRA rule. https://www.acacompliancegroup.com/news/compliance-alert/new-finra-rule-3210-accounts-other-broker-dealers-and-financial-institutions

WalkaboutStache

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The person should make sure to read the policy document (not rely on HR or other second hand sources).  There may be an exception for pre-existing accounts of spouses, subject to approval by the firm (that is in the FINRA link above - good source).  The person will still need to agree to monitoring or reporting of positions, and will certainly need to pre-clear trades. 

Exception: On the trade clearance side, it is possible that investments in index funds do not need to be pre-cleared.

Exception to the exception: Some index funds are sector-heavy (say, over 30% in industrials or finance).  In some cases, that gives rise to a pre-clearance obligation.  There may be substantially identical products out there that do not have such exposure.

oldmannickels

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The person should make sure to read the policy document (not rely on HR or other second hand sources).  There may be an exception for pre-existing accounts of spouses, subject to approval by the firm (that is in the FINRA link above - good source).  The person will still need to agree to monitoring or reporting of positions, and will certainly need to pre-clear trades. 

Exception: On the trade clearance side, it is possible that investments in index funds do not need to be pre-cleared.

Exception to the exception: Some index funds are sector-heavy (say, over 30% in industrials or finance).  In some cases, that gives rise to a pre-clearance obligation.  There may be substantially identical products out there that do not have such exposure.

I feel like that is the rule, but most companies have had so many issues with self reporting, pre-clearing  violations that they opt for a better safe than sorry policy to the detriment of spouses accounts

PizzaSteve

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Accounting firms also limit the trading and financial accounts senior employees can hold and require all financial assets to be recorded in a database for compliance monitoring.  Because they audit many companies, employees are also required to close certain financial accounts and even sell stocks in firms they audit, often at a financial cost to employees (taxes, lost opportunities) that they do not reimburse.  It sucks.

Some Top Strategy Firms hold retirement assets for employees in a sort of blind trust, where employees cant know where assets are invested, other than as a category of investment (eg hedge fund, us stock index, bonds, etc.).  The management fees for this structure drags earnings a bit, which also sucks, but it is required.

On the plus side, these policies tend to limit speculation and market timing by employees and employer contributions tend to be fairly generous.
« Last Edit: August 23, 2018, 08:34:42 AM by PizzaSteve »

Novik

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Or what happens when a Merrill employee marries someone from another bank with a similar policy. Does the universe vanish because the paradox can't be resolved?

A friend of mine's parents were both investment bankers - for different large Canadian banks. I haven't heard the whole story, but apparently it was quite the process to convince both compliance departments that no, an employee of Bank A would not hold all their accounts with Bank B and vice versa.  They both kept their jobs so it must have worked out somehow. I know at least one parent was required to have their assets managed by someone else for a while to protect against any possible insider trading. Sounds like a hassle to work for a bank!