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Merrill Edge Launches Robo-Advisor With a Twist

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Bank of America says its Merrill Edge platform now includes Guided Investing portfolios for mass-affluent clients. Investors with as little as $5,000 can use the service to obtain portfolios for 0.45% a year that are based on 10 portfolios comprising ETFs from several fund families like Vanguard.

The program is run more like a managed account than a self-directed account, says David Poole, head of advisory and client services for Merrill Edge.

The new Merrill Edge service gives investors “access to strategies that are built and managed by the Global Wealth & Investment Management Chief Investment Office, not by algorithms,” and that are based on client investment preferences, priorities and time horizons, according to Poole.

“The program overall is a digital, online advisory program. It has an innovative and intuitive interface that is simple for clients to navigate,” he explained in an interview. “It’s more in the advised spectrum [of online platforms], since we have a Chief Investment Office that designs, manages and continues to manage the portfolios” as the market shifts over time.

“It’s truly the best of both worlds,” Poole added.

The human side of Guided Investing, he explains, is that Merrill Edge clients have access to about 2,000 advisors working in Bank of America financial centers and bank branches. They can meet one-on-one with clients.

“There is a broad support network of individuals who are well versed in advice,” Poole said.

They are available, for instance, if client want to discuss a shift in the market or a major global news event that could affect portfolios.

“Another advantage of the Guided Investing portfolios is that our Chief Investment Office can react to market events and convey messages that may calm nerves and share a ‘stay the course’ message — or make a change in the portfolios, as needed,” the executive explained.

In October, when BofA said it was working on the Guided Investing rollout, Merrill Edge had more than $145 billion in client assets.

Some industry research estimates that the demand for robo-investing services is about $80 billion. Vanguard’s Personal Advisor Services has some $47 billion, for instance; its minimum account size is $50,000. Schwab Intelligent Portfolios have a $5,000 minimum and have accumulated over $12 billion in assets.

Managed Account Advisors is the official Merrill Lynch affiliate handling the portfolio management role for the Guided Investing strategies, which are based on GWIM CIO recommendations, the bank explains.

Automated Branches

Bank of America CEO Brian Moynihan said last week that the bank is testing “completely automated” branches to cut costs.

Dean Athanasia, co-head of consumer banking, discussed the new branches at a financial services meeting in Florida, according to a report in The Charlotte Observer.

The three automated small branches are located in Denver and Minneapolis. In addition to ATMs, they include video-conferencing technology that lets customers talk to offsite bank employees. But they do have an onsite banker, too.

The bank plans to review how much staff time is needed at the new branches. It also intends to rollout a voice-activated virtual assistant for smartphones, according to the news report. 


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