From the November 2009 issue of Investment Advisor • Subscribe!

Merrill's Big Plans

Help, and the "importance of culture at this organization," are what Sallie Krawcheck spoke of on October 5th at her first press conference as president of Global Wealth Management & Investment Management at Bank of America Merrill Lynch.

Bank of America is staking $20 million--in the fourth quarter of 2009 alone--on its re-introduction of the Merrill Lynch brand, with a new ad campaign aimed at "affluent" and high-net-worth investors. Merrill Lynch also has ultra-high-net-worth investors at the Private Bank and Investment Group and, of course, Bank of America owns U.S. Trust.

Krawcheck will oversee nearly 15,000 reps at Merrill Global Wealth Management, the private bank, U.S Trust and the investment management arm of Bank of America Merrill Lynch.

The essence of the new Merrill Lynch is an emphasis, says Krawcheck, on "one-to-one relationships" with clients, "putting clients first," delivering "personalized advice" that's "in their best interests." This all sounds like the kind of personalized advice delivered by investment advisors--but according to Krawcheck, it's delivered by Merrill Lynch registered representatives--"financial advisors."

So if that's what the new Merrill Lynch is about, then does that mean that the firm is embracing the fiduciary standard that is part of the proposed Investor Protection Act now being intensely debated in Washington?

Not so, says Krawcheck. These are broker/dealer reps, not investment advisors, and they "put clients first, they're strong client advocates." She cautioned a reporter to be careful of rushing to judge that RIAs are "superior." Part of the Merrill Lynch culture is to "put clients first," she asserted.

To that end the new ad campaign "help2" portrays Merrill Lynch helping clients get back to investing: "help2 grow, help2 retire, help2 succeed, help2 cherish, and help2 make it last."

The Bank of America-Merrill Lynch combination is formidable and they seem to be tackling an area that has long been a thorny issue for financial supermarkets: referrals. Krawcheck notes that for the year-to-date there have been 43,000 referrals from "consumer [banking] into wealth management." She explains that there is "significant opportunity" to sustain referrals for a long, long time: there are so many affluent consumers banking at Bank of America--those with $250,000 or more to invest--that the consumer bank could refer 25,000 customers a month--into wealth management "for 50 years."

At the press event, Krawcheck also introduced findings of a Merrill Lynch Affluent Insights Quarterly survey--a phone survey of 1,000 affluent investors with $250,000 or more to invest, nearly half of whom (48%) work with either a Merrill Lynch broker or another advisor. Trust was big issue among survey participants: 81% state that their financial advisor: "Is someone I trust." A majority of those surveyed, 78%, say their advisor: "Gives me customized advice that addresses the specific needs and challenges I face." And 77% say that their financial advisor: "Is proactive when it comes to advice and guidance."

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