Account Consolidation

Bank of America has launched a unified managed account service, called Portfolio Strategies Managed Account, that combines a separately managed accounts platform and managed mutual fund wrap account platform into one entity. “Our clients wanted simplicity but they didn’t want to sacrifice sophistication in terms of investment strategies to get that.” The new platform is probably going to be the “fastest growing fee-based platform we have in Premier Banking and Investments,” in 2007, says Boston-based Dan McNamara, investment products group executive for the bank. “It’s probably going to be bigger than we had originally anticipated.”

The big bank’s fee-based advisory business has grown “significantly” and there is a heightened awareness and acceptance of fee-based business within the organization, McNamara explains. Client demographics have changed and, because of their higher net worth, clients can buy multiple investment products. This new offering “simplifies the delivery of the solution to the client. Now we have clients that had three, four, or five accounts with us [that are] down to one. It’s a much better experience.” A client that had three different separate account managers for, say, large cap, small cap, and international equities, and a couple of mutual fund wrap accounts can consolidate them into one Portfolio Strategies Managed Account.

Targeted to Banc of America Investment Services’ affluent clients–with $250,000 to $3 million to invest, the Portfolio Strategies platform’s average account size since its November launch is about $500,000, and that number is higher than the Banc’s average managed account or mutual fund wrap account size. Historically, the Banc’s advisors could offer clients a mutual fund wrap program, Fund Strategies, for accounts with a minimum of $50,000 to invest. Fund Strategies’ average account size is about $140,000. Next up the wealth ladder was the separate accounts program, Consulting Services Selects, with investment minimums of $100,000 to $250,000.