NEW YORK, May 1 (Reuters) - Morgan Stanley's wealth management business said on Monday it is lowering the commissions that brokers earn on stock trades, exchange-traded funds and annuities amid pressure to lower costs for clients.
Commissions for brokers are now capped at 2.5 percent of a trade, the investment news website AdvisorHub.com reported earlier Monday. It is unclear if there was previously a limit on commissions.
Morgan Stanley spokeswoman Christine Jockle said that the change, which also affects unit investment trusts, is intended to "better align client costs" with brokerage services.
"Overall, these changes will lower client costs, in some cases substantially," Jockle wrote in an emailed statement.
The wealth management industry has taken steps to level the fees and commissions that brokers charge on investment products like mutual funds throughout the past year in preparation for a new U.S. Labor Department retirement regulation.
The Labor Department's fiduciary rule, which is set to take effect on June 9, requires firms to eliminate any conflict of interest, such as certain sales incentives, for brokers who are advising clients on their retirement savings.
In March, Morgan Stanley eliminated commissions and finder's fees for advisers who manage 401(k) plans, and started paying a level fee to advisers handling those accounts, according to media reports. (Reporting by Elizabeth Dilts; Editing by Lisa Shumaker)