How Merrill Clear Was Born From Surprise Boomer Discovery

When clients talk, Merrill Lynch listens.

This variation on an ex-rival’s ad theme came into play fortissimo while Bank of America Merril Lynch was fixed on creating a new retirement-income product. But six months of baby boomer focus groups unearthed that retirement income isn’t folks’ top concern — it’s retirement outcome they most want help with.

So the wirehouse scrapped the new-product idea and got cracking on something altogether different: a way for advisors to engage clients and prospects in an in-depth conversation leading to better outcomes plus a preview peek at them.

Merrill Lynch Clear, launched last May, is a framework that helps FAs explore seven client life priorities: family, home, finances, work, health, leisure and giving. Clearing a path to financial-goals analysis and therefore more financial planning, Clear segues right into Merrill’s Goals-Based Wealth Management approach.

Thus far, of the firm’s 13,700 FAs, 8,600 are using some aspect of the Clear process, which includes videos, white papers and seminars. About 4,500 advisors are employing Clear’s crown jewel-tool: a series of iPad “Discovery Apps” with colorful infographics that focus on each of the seven priorities, plus retirement-specific components such as Social Security.

Hunkering down with FAs’ iPads, advisors and clients — or prospects — can check out customized what-if retirement scenarios. For instance, with the Health App, it’s possible to forecast out-of-pocket costs based on clients’ specific medical conditions as they age.

ThinkAdvisor recently interviewed David Tyrie, the man whose call it was to scrap the new retirement income product idea and focus instead on his brainchild: a way to help plan for satisfying retirement outcomes.

From his Boston office, Tyrie, managing director and head of retirement and personal wealth solutions, and institutional retirement solutions, answered the who, what, when, where and why of Merrill Lynch Clear. Here are highlights:

Think Advisor:  Before Clear, was something lacking in the way Merrill advisors were engaging clients and prospects about retirement?

David Tyrie: To be blunt, the topic of retirement is a really hard one, and we learned from our focus groups that it’s really confusing because there are too many moving parts. We’re dealing with the boomer masses, who are very different from any other generation. Previous generations had defined benefit plan paychecks in retirement. Today we’re dealing with the first group who has [retirement funding] on their shoulders.

What’s the firm’s goal with ML Clear?

Better conversations with existing customers and longer relationships.

Does the client or prospect need to have a minimum asset level for the FA to use Clear?

No threshold is mandated by any stretch of the imagination. But our client base usually starts at $250,000. We’re typically dealing with boomers. We’ve found that the most successful conversations are with people 50 years old and above because they’re thinking about retirement or are already retired. What makes them a particularly good opportunity for using ML Clear?

In many cases, they have assets in other places. What they want to know is how to simplify that and bring everything together. ML Clear does it. We’re essentially adopting a new way of doing client management.

To what extent is the Clear framework helping advisors versus helping their clients?

It gives clarity to both. It enables a whole new level of profiling clients and understanding their needs. The better you know your client, the better the solution set — and that goes well beyond traditional things like suitability. For the clients, it’s enabled us to educate them and find out what trade-offs are necessary.

How much more financial planning are FAS doing because they’re using Clear?

I don’t call it financial planning. I call it the financial strategy. Every single client that engages with ML Clear is engaging in a very deep conversation about their financial strategy.

There are 4,500 specially trained FAs using the Discovery App. How does that stack up with the number you projected?

We’ve exceeded our goal. We thought we’d have on the order of 2,000.

How much FA resistance has there been to adopt the process?

We’ve met with no resistance whatsoever with advisors saying they don’t want to use the iPad. In many cases, our longest tenured advisors are loving the adoption of the iPad because it’s very simple and intuitive. It’s not linear — they can go anywhere clients want to go.

Apart from using iPads, how else can FAs engage folks with Clear?

There’s a paper-based version, and Clear can be done in seminar format with large groups.

 How would you assess Clear’s success now that it’s been in use about a year?

 Client satisfaction is off the charts. We’re giving clients enough confidence to start consolidating additional assets and capabilities with us. By that reaction, it’s proven to be an outstanding decision. This is something you have to measure by “Are clients satisfied, and do you keep those clients for a long time?”

What about results from the client’s point of view?

The most important one is the peace of mind that people walk away with. But we’re struggling with how to measure that.

Please talk about the genesis of Clear.

We stumbled upon what became ML Clear after years of research.  We originally thought we were going to create a new product for retirement income. But then, in six months of focus groups in 2013, baby boomers told us, “No, no. It’s not about retirement income. It’s about ‘How am going to be living my life?’” We found that they weren’t looking for a product; so we did a complete 180-degeee turn. But why isn’t retirement income the issue for them?

For the last 20 years, Boomers have been in an accumulation mode. By at age 65, it’s not about accumulating the money. It’s about “How am I going to maintain, and what is the outcome of my life going to look like?”

Was there anything in particular that helped convince you to go in this other direction?