Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Portfolio > Portfolio Construction

BofA Merrill Brings Advisors to Robo Program

Your article was successfully shared with the contacts you provided.

Bank of America on Monday added human advisors to its robo-advice platform, creating a hybrid offering aimed at the mass-affluent market. The platform, Merrill Guided Investing, now offers an option to work with a financial solutions advisor (or FSA), along with an improved digital platform.

“This new high-tech and high-touch offering is designed to serve clients who want both a ‘do it yourself’ experience together with help from an advisor,” according to Aron Levine, head of Consumer Banking and Investments for Bank of America.

For self-directed investors, the bank offers the self-directed Merrill Edge platform (since 2010). Clients who opt not to use an advisor can still use Merrill Guided Investing, which was launched in 2017 and includes some non-digital portfolio management services. The two programs had client assets of about $211 billion as of March 31.

Investors working in the new program with a financial solutions advisor can discuss their long-term financial goals, develop a plan and track progress toward those goals using 25 investment strategies vs. 15 strategies with Merrill Guided Investing.

The new program has a $20,000 minimum and an annual fee of 0.85% vs. a $5,000 minimum and yearly fee of 0.45% with Merrill Guided Investing.

Merrill has about 2,700 FSAs and plans to add another 300 by year-end.

Analyst’s Views

The bank’s introduction of a hybrid digital advice model has been in the works for some time, says Gavin Spitzner, a wealth management and technology consultant. “It was fully expected given the success we’ve seen of hybrid models (vs. pure robos) across the industry.”

Personal Capital charges about 0.89% for its model. And BofA “sees that it can charge more for the hybrid” robo, according to the head of Wealth Consulting Partners.

Based on the compensation model of call center representatives, the new program is a “win-win for clients who want human interaction and for the firm in terms of their economics and profitability,” said Spitzner.

While most of the client interaction is expected to be remote, “BofA is looking to leverage a lot of branch brick and mortar that doesn’t get much traffic anymore, combined with what will be 3,000 FSAs to proactively reach out to mass affluent clients that don’t have a Merrill relationship, and offer them the option of meeting in person.”

— Related on ThinkAdvisor:


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.