Merrill Lynch Wealth Management is restricting what its staff can accept as gifts and entertainment from investment managers and other third parties, according to news reports.

Due to “potential conflicts of interest,” third-party product and service providers will no longer be able to “pay for gifts, meals and entertainment for employees” of Merrill, according to a memo sent to staff on Tuesday, FA-IQ sister publication FundFire writes. 

The rule change doesn’t apply to Merrill Edge brokers nor to brokers in Bank of America Private Bank, according to the publication. BofA is Merrill Lynch’s parent company.

Merrill employees, however, are no longer allowed to accept meals from third-party providers, unless they’re associated with training or seminars approved by Merrill, FundFire writes, citing the memo. Merrill staff can still attend “business entertainment events” hosted by third-party providers, but they’ll now have to pick up the tab for their portion of the expenses, the wirehouse says, according to the publication.

Previously, Merrill permitted employees to accept meals and entertainment worth up to $300 per event, and up to $1,000 per person annually from each firm, FundFire writes. 

The new rules allow for certain exceptions, however. Merrill staff can accept novelty items if they have the third-party product provider’s logo, are worth less than $50 and aren’t “frequent or excessive,” the company told employees, according to FundFire. Previously, Merrill employees could accept gifts worth up to $100 even if they didn’t have the third-party’s logo, the publication writes. 

Merrill’s recent changes to its third-party gift policy reflect the growing trend to eliminate conflicts of interest in the wealth management space, arising from the SEC’s Regulation Best Interest, Mark Elzweig, president of recruiting firm Mark Elzweig Co., tells FundFire. 

Finra also issued guidance recently forbidding its members “from giving anything of value in excess of $100 per year to any person where such payment is in relation to the business of the recipient’s employer,” according to the industry self-regulator’s website, the publication writes. 

Josh Broaded, co-head of U.S. regulatory compliance at ACA Compliance Group, also believes that Merrill’s changes could be connected to the SEC’s Reg BI, he tells FA-IQ sister publication Ignites. 

Merrill Lynch did not comment to Ignites on whether that was the case. 

Broaded also tells the publication that Merrill’s stance is one of the more conservative in the wealth management industry. But other firms are likely to follow, he says, according to Ignites.

A Wells Fargo spokesperson confirms to the publication that it allows meals as part of business entertainment. A Morgan Stanley representative tells Ignites that the company’s policies follow regulatory guidance and are designed to mitigate conflicts of interest. A UBS spokesperson declined comment to the publication. 

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