Merrill Lynch Cranks Up Client Minimums To Carve Out More Space For Merrill Edge "Mass Affluent" Accounts

Friday, January 06, 2012 08:26
Merrill Lynch Cranks Up Client Minimums To Carve Out More Space For Merrill Edge

Tags: high net worth

Bank of America now has free rein to gather assets from roughly 8 million "mass affluent" customers with under $250,000 to invest after subsidiary Merrill Lynch raised its own account minimums to exclude investors at that level.

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Previously, Merrill Lynch was willing to accept clients with $100,000 on the table, but now the minimum in most cases will be $250,000.


This eliminates the implied competition between Merrill Lynch proper and Bank of America's mid-market "Merrill Edge" program for these assets.


Now the mass affluent investor belongs to the telephone support teams and bank reps at Merrill Ege, and the traditional advisors have to hunt bigger prospects.


Were Merrill Lynch's books clogged with too many smaller clients? Were advisors there not concentrating hard enough on capturing truly high-net-worth accounts?


It seems more likely that these advisors were prospecting everyone they could get -- the bigger, the better -- but the upper-middle-class households were gravitating toward the "real" Merrill brand they'd grown up seeing advertised.


Bank of America clearly wants those accounts to stay close to the bank branches.


We'll learn a lot about the American economy by seeing which of these strategies works out best in the new year. If Merrill Lynch can keep its momentum by concentrating on HNW accounts, great.


If they falter, then suddenly the mass client looks more attractive -- and Merrill Edge is sitting pretty.

Comments (1)

This from the same wirehouse industry that claims that the adoption of the Fiduciary standard will prevent them from working with smaller accounts. Under 250k gets an 800 number! What hypocrisy!
chuck@gsf , January 06, 2012

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