January 17, 2012

BofA Lowers Fees, Expands Online Platform for Merrill Edge

These changes aim to boost business with mass-affluent investors who do most of their trading online

Bank of America has made changes to attract mass-affluent investors. (Photo: AP) Bank of America has made changes to attract mass-affluent investors. (Photo: AP)

Bank of America (BAC) said Monday that it dropped some charges, simplified its trading fees and added a new trading platform that includes more fixed-income and other products for self-directed Merrill Edge clients.

This news comes 12 days after BofA raised the asset level for new client households on its Merrill Lynch wealth-management platform for high-net-worth investors, a move that experts said could boost the market for the bank’s mass-affluent Merrill Edge operations–which targets investors with $50,000-$250,000 in investable assets.   

“The expansion of the Merrill Edge platform is just another example of how we continue to deliver investment guidance to meet the unique needs of our investment clients,” said Dean Athanasia, an executive with BofA’s Preferred and Small Business operations, which include Merrill Edge, in a press release. “Clients will get more from our platform through enhancements that offer convenient and leading-edge tools they need to help them invest, at a very competitive, simplified pricing structure.”

Pricing

Merrill Edge eliminated its four-tiered pricing structure and will now allow its self-directed investors to trade stocks and ETFs for a flat fee of $6.95. Clients with more than $25,000 in cash balances with Merrill Edge or Bank of America will continue to receive 30 free trades per month. 

The company says that it also eliminated account minimums and maintenance fees for self-directed accounts.

“One of our top goals is to listen to our clients and deliver solutions that help them meet their needs in a way that is easy to understand,” said Alok Prasad, head of Merrill Edge, in a statement. “Simplifying our pricing structure met a key client need, while also allowing us to take an industry-leading position. We expect about 75% of Merrill Edge self-directed clients will see lower per trade fees, and no client will see an increase in these fees.”

Platform Changes

BofA says that the new trading platform Merrill Edge Market Pro is designed to give clients real-time market analysis for “greater control over every trade,” as well as more access to proprietary research.

The platform can be used by clients with $50,000 or more in investable assets or those making 60-plus self-directed trades per year.

“The November Merrill Edge Report indicated that half of mass-affluent consumers will consider reallocating their portfolios over the next six months,” explained Prasad. “New tools like Merrill Edge Market Pro allow our clients to receive up-to-the-minute trading information to help them make decisions on their own, and give clients the choice to help them manage their investments in the way that’s most convenient for them.”

The platform includes an expanded list of fixed-income products, including corporate, agency, municipal and Treasury securities, well as more third-party research. In addition, over the past year, Merrill Edge has added 800-plus mutual funds from more than 100 fund families–including 600 new no-load mutual funds–and says more new funds “continue to be added.”

In 2011, Bank of America said it doubled the number of Merrill Edge Financial Solutions Advisors to more than 1,200 nationwide. They are located in banking centers throughout the United States or in the three phone-based Merrill Edge Advisory Centers.

 

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