Displaying items by tag: merrill lynch

(New York)

Usually big Wall Street banks are pretty moderate in their outlooks, and they are mostly bullish in general. Well, Bank of America Merrill Lynch didn’t hold back this week when they said the S&P 500 was at risk of a 16.5% tumble in the near term. The bank said that it expects the S&P 500 to fall 20 to 30 bp for every basis point increase in the ten-year Treasury. The bank thinks yields will rise 55 bp by the end the year, implying an up to 16.5% tumble in stocks. The bank says valuations are overstretched by almost every metric.

FINSUM: The bank did point out three sectors it felt were safer, which are energy, communications services, and health care.

(New York)

Congratulations are in order for Merrill Lynch. In what is mundane—but big—news, the firm has just introduced a paperless onboarding solution for clients. Barron’s describes it this way: “fully digitizes the procedure, allowing clients to approve new account openings through digital attestation on a computer, tablet, or cellphone. What once took a week or more can now be done in a day … That may not be its standout feature, though. COBE allows client associates to simultaneously enter information and process multiple new clients in the same household—for multiple accounts … During an online demonstration, Merrill executives showed a fictitious example of a client associate entering information for a couple who wants to open a joint brokerage account, two IRAs, a joint bank checking account, and a custodial account for their niece. Once an associate has entered as much information as he has from an earlier client conversation, he can invite the new clients to collaborate virtually on the rest. They can view the same screen and make changes to it simultaneously. During the process, the associate can click a button to perform a real-time identity check on the client to satisfy know-your-customer requirements, without asking the client to upload documents.”.

FINSUM: This sounds like the holy grail of onboarding tools. Merrill should package this up and sell it as a service to others in the industry!

(New York)

Merrill Lynch is giving its herd of advisors a break on their incentive compensation. Brokers at Merrill have a piece of incentive compensation which gives them a bonus if at least 30% of clients use three specific services. But instead of making the cut off for meeting those quotas July of this year, they have extended it to January 2021, giving brokers an extra 6 months to meet those goals. Merrill Lynch says that the change will allow advisors to focus on best serving clients in this volatile period.

FINSUM: Even with the six-month extension, given the market volatility, it will likely be difficult to cross-sell clients into new products.

(New York)

One thing about the wealth management landscape that has never made much sense is how JP Morgan is not early as big a player as one might expect given the overall strength of its brand. Morgan Stanley and Merrill Lynch hog all the AUM and attention, with JP Morgan and Goldman Sachs mostly on the outside looking in. Well, that may be about to change, as JP Morgan is now planning some big changes to its wealth management business. According to the WSJ “The bank is creating a unit that will combine its U.S. wealth-management operations for affluent clients and the Chase branch network’s financial-advisory business”.

FINSUM: This sounds like a plan to go after mass market wealth management like Morgan Stanley or the Thundering Herd. Could be a big play.

(New York)
“Cross-selling” has been the name of the game at Bank of America Merrill Lynch for years, but Merrill is about to take the idea to new heights. Partnering with BofA, the Thundering Herd is now offering mortgage discounts of up to half a percentage point to clients if they bring more of their business to the brokerage or the bank. According to Barron’s “Merrill is testing the rate reductions in California, Oregon, Washington, New York, New Jersey, Connecticut and Florida. The 50-basis-point reduction is available to clients with $500,000 in deposits or investments to qualify for the half a percent mortgage reduction.”

FINSUM: This could be a considerable competitive advantage for luring clients away from other brokerages. We expect Wells Fargo will follow suit, but it will be harder for Morgan Stanley and UBS to do so.