The strategy behind Bank of America's "Merrill Edge" push into the mass market continues to evolve as the bank cuts trading fees and puts work into making its self-directed platform more attractive to true middle-class investors.
The association of Merrill Edge with a "self-directed trading platform" seems odd in light of the way that the unit had previously been characterized as a way to deliver upscale financial advice to smaller accounts.
Substantial hiring over the past year has created a big sales force of "financial solutions advisors" in bank branches and available via telephone. These advisors were originally characterized as a match for investors with $100,000 to $250,000.
Nonetheless, BofA now seems eager to court online traders with $25,000 or less. Commissions on the platform have dropped to a flat $6.95 per trade and the account minimum has dropped to zero.
Given recent efforts to carve an exclusive space for Merrill Edge, it's clear that the executives at BofA have a lot invested in this program and are willing to do whatever it takes to push asset to it.
Remember, Merrill Lynch advisors are now effectively being told to push any account with under $250,000 in it down to Merrill Edge.
Now this new push for accounts on the low end of the scale is noteworthy.
Merrill Edge brokerage accounts are linked to BofA checking and savings balances, rewarding those who have essentially "cross-sold themselves" by pursuing multiple relationships with the bank.
Is the plan here to have the little accounts subsidize all those new advisors? Were the "mass affluent" accounts simply not coming around fast enough?