Merrill Edge

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Merrill Edge
Division
IndustryFinancial services
FoundedJune 21, 2010; 9 years ago (2010-06-21)
Area served
United States
Key people
Aron Levine
ServicesStockbroker
Electronic trading platform
Number of employees
2,500
ParentBank of America
Websitewww.merrilledge.com

Merrill Edge is an electronic trading platform provided by BofA Securities, part of Bank of America's retail banking division. It was launched on June 21, 2010.

Merrill Edge was created to merge Bank of America Online Investing (Quick & Reilly) and Merrill Lynch's research, investment tools, and call center counsel. When it was established, Merrill Edge had 500,000 Bank of America customers. The firm focuses on investors with between $0 and $250,000 in investable assets. In 2015, the service held $118 billion from 2,000,000 customers and employed 2,500 advisers working in bank branches and call centers.

History[edit]

Launched on June 21, 2010,[1] Merrill Edge is a "a no-frills brokerage unit" of parent company Bank of America's retail banking division.[2] Created after Merrill Lynch became a subsidiary of Bank of America in 2008, it contains the Merrill Lynch name and its employees are included in Merrill Lynch's number of employees.[3] It merged Bank of America Online Investing (Quick & Reilly) and Merrill Lynch's research, investment tools, and call center counsel.[4][5] At its inception, Merrill Edge had 500,000 customers from Bank of America's current clients.[4] Bank of America launched the product to compete with Charles Schwab Corporation and Fidelity Investments for the numerous fledgling investors unprepared for comprehensive advice.[6] Bank of America aimed to build brand loyalty among these younger investors who generally have strong technical skills and appreciate a higher degree of openness and personal oversight of their accounts.[4] It is intended for well-educated clients who want to invest between $100,000 and $250,000.[6] Other Merrill Edge competitors are cheap automated Internet advising services like Wealthfront or Personal Capital.[3]

In 2015, the five-year-old Merrill Edge had $118 billion in 2 million customers' investable assets.[7][8] It accumulated the assets through three main avenues: existing Bank of America customers (which accounted for around a third of the assets held), Merrill Lynch referrals (which accounted for a marginally higher proportion of the assets), and marketing (which accounted for the rest).[7][9] Bank of America added videoconferencing kiosks to their bank branches in the Los Angeles metropolitan area and the Washington metropolitan area to promote Merrill Edge and to allow customers to receive counsel from employees based in Arizona, Florida, and New Jersey. Bank of America marketed Merrill Edge on their locations' windows and automated teller machines.[10] The service allows customers three options for doing trades: making the trades themselves, handing over for every order a $6.95 fee, and paying a fee of 1% of the capital for a separately managed account.[7]

In 2015, Merrill Edge had 2,500 advisers working in bank branches and call centers. Roughly 1,500 of the advisers worked in the bank branches. The Wall Street Journal reported in 2015 that Bank of America intends to increase by twofold Merrill Edge's banking branch employee number.[7] According to Reuters, the service's "financial solution advisers" are "licensed broker-dealers and bankers who are paid a salary", whereas full-service brokers receive commissions.[5] Aron Levine, the head of Preferred Banking and Merrill Edge, manages the bank branch advisers.[11] In May 2018, Merrill Lynch along with Merrill Edge launched ESG model portfolios.[12][13]

Referrals[edit]

Merrill Lynch brokers were told to refer customers with less than $250,000 in investments to Merrill Edge.[9] The intent was for the brokers to focus on wealthier investors and for Merrill Edge to reciprocate by sending customer with more than $250,000 in investments to Merrill Lynch.[9] In 2015, the Merrill Lynch broker incentive system changed to give brokers no money for managing accounts less than $250,000.[9] In 2014, Merrill Edge referred 30,000 customers to Merrill Lynch and U.S. Trust. Converted referrals gave Merrill Lynch an additional $4 billion to manage, which when apportioned among Merrill Lynch's 14,000 advisers is roughly $285,700 and two referrals per adviser. When referred to Merrill Lynch, Merrill Edge's customers sometimes do not migrate their accounts because of the higher costs for trades.[9]

Products[edit]

In 2012, Merrill Edge released Face Retirement, a product that age progresses a submitted photo of a person. The aim of the tool is to convince people to save for retirement earlier because a study has shown that younger people who think of themselves being older save more.[14]

In a 2015 interview with The Wall Street Journal, Aron Levine, head of Merrill Edge, said the company was considering an "automated advice service".[7] Dozens of Bank of America workers worked on a prototype of the product, which is planned for release in 2016.[8] Merrill Edge will begin offering to customers robo-advisors that employ algorithms populated with dozens of components. Bank of America customers who invest less than $250,000 usually do not receive counsel from Merrill Edge employees, so the robo-advisors would enable them to receive advice.[15]

References[edit]

  1. ^ Veneziani, Vince (2010-06-17). "Merrill Lynch Launching Online Discount Brokerage Next Monday". Business Insider. Archived from the original on 2016-02-14. Retrieved 2016-02-14.
  2. ^ Horowitz, Jed (2014-02-21). Hay, Andrew (ed.). "Merrill executive loses regional sales post in western U.S." Reuters. Archived from the original on 2016-02-14. Retrieved 2016-02-14.
  3. ^ a b Braswell, Mason (2014-09-04). "Bank of America doubling down on Merrill Edge". InvestmentNews. Crain Communications. Archived from the original on 2016-02-14. Retrieved 2016-02-14.
  4. ^ a b c Gasparro, Annie (2010-06-18). "Merrill Makes Move Into Online Investing". The Wall Street Journal. Archived from the original on 2016-02-14. Retrieved 2016-02-14.
  5. ^ a b Giannone, Joseph A. (2011-11-21). "Merrill Edge adds advisers, clients and assets". Reuters. Archived from the original on 2016-02-14. Retrieved 2016-02-14.
  6. ^ a b Barr, Colin (2011-01-24). "'Mass affluent' are strapped too, BofA finds". Fortune. Archived from the original on 2016-02-14. Retrieved 2016-02-14.
  7. ^ a b c d e Wursthorn, Michael (2015-05-07). "Merrill Edge May Add 'Robo' Advice". The Wall Street Journal. Archived from the original on 2016-02-14. Retrieved 2016-02-14.
  8. ^ a b Son, Hugh (2015-11-06). "A Money-Managing Robot Is About to Join BofA's Thundering Herd". Bloomberg Businessweek. Archived from the original on 2016-02-14. Retrieved 2016-02-14.
  9. ^ a b c d e Wursthorn, Michael (2015-05-05). "Merrill Lynch's Brokers Want an Edge". The Wall Street Journal. Archived from the original on 2016-02-14. Retrieved 2016-02-14.
  10. ^ Farzad, Roben; Son, Hugh (2011-03-02). "The Bull Whisperer". Bloomberg Businessweek. Archived from the original on 2016-02-14. Retrieved 2016-02-14.
  11. ^ Dilts, Elizabeth (2015-02-23). Wilchins, Dan; Pickering, John (eds.). "Bank of America chips away at brokerage industry truce". Reuters. Archived from the original on 2016-02-14. Retrieved 2016-02-14.
  12. ^ "Merrill Lynch and Merrill Edge introduce new ESG model portfolios - Private Banker International". www.verdict.co.uk. Retrieved 2018-05-14.
  13. ^ "Merrill Lynch and Merrill Edge Launch Impact Portfolios: Portfolio Products | ThinkAdvisor". ThinkAdvisor. Retrieved 2018-05-14.
  14. ^ Benoit, David (2012-12-04). "BofA's Merrill Edge: Here to Make You Look Old". The Wall Street Journal. Archived from the original on 2016-02-14. Retrieved 2016-02-14.
  15. ^ Walsh, Dustin (2016-02-07). "Will robots zap the job market? Knowledge-based automation could make machines the new workforce". Crain's Detroit Business. Crain Communications. Archived from the original on 2016-02-14. Retrieved 2016-02-14.

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