Merrill Lynch adding human advisers to Guided Investing robo

The advisers will fill a service gap between the firm's purely digital, self-directed robo-adviser and the full-service advisers of Merrill Lynch

Jun 3, 2019 @ 2:35 pm

By Ryan W. Neal

Bank of America is adding human financial advisers to its digital advice platform, Merrill Guided Investing.

The advisers will fill a service gap between the firm's purely digital, self-directed robo-adviser and the full-service advisers of Merrill Lynch Wealth Management. Clients with at least $20,000 can talk to an adviser, receive some goals-based financial planning, select an investment strategy based on the adviser's recommendation, open and fund an account, and receive ongoing advice.

Bank of America will charge an annual 85-basis-point fee for the service, compared to the 45 bps it charges for Guided Investing, which has a $5,000 minimum. The hybrid model also offers access to 10 additional investment strategies beyond the 15 available on Guided Investing.

Supporting the service is Merrill Financial Solutions Advisors, a salary-based team of advisers launched in 2011 to provide model-based managed account services from Bank of America branch offices and call centers at a lower price point than traditional Merrill Lynch advisers.

Clients can interact with the FSA advisers via phone, chat or video conferencing as they would with other hybrid-robo services, or book an in-person meeting at brick-and-mortar Bank of America and Merrill Lynch offices around the country.

Aron Levine, Bank of America's head of consumer banking and investments, said the company already employs 2,700 FSA advisers and is adding 300 more to work in Merrill offices.

The advisers generally have about 10 years of experience and many were brought up through the bank's training program, Mr. Levine said. They can provide advice on banking, lending and investing using one of the 25 model portfolios built and managed by the firm's chief investment officer.

Clients with more advanced needs, such as trust and estate planning, insurance or alternative investments, will be recommended to a full-service Merrill wealth manager.

The solution creates a continuum of service models that Mr. Levine said runs the gamut of investor needs: Merrill Edge for do-it-yourselfers, Merrill Guided Investing for mass-affluent accounts, advisers for slightly wealthier clients who need some help, and Merrill Wealth Management for high-net-worth individuals.

"This is all about how do we serve and continue serving the 67 million U.S. households that we work with," Mr. Levine said.

The company has about 100,000 client referrals flowing back and forth between the Merrill FSA and Wealth Management businesses, said Kirstin Hill, strategic performance executive at Merrill Lynch Wealth Management. Bringing FSA advisers into Merrill branch offices also creates an effective talent pipeline for the full-service advisory business.

David Goldstone, a research analyst at Backend Benchmarking, said Merrill's new platform fits into a growing trend of hybrid-robo services that's been driven by the success of Vanguard Personal Advisor Services and tiered models like Schwab Intelligent Portfolios and Betterment.

"Platforms want to service different types of investors and investors at all wealth levels," Mr. Goldstone said in an email. "A platform that has a digital-only product, a product with access to a call center of advisers followed by full service and private wealth advice offerings can be attractive to a wide spectrum of investors. A robust platform like this can also accommodate an investor as they grow in wealth and complexity, allowing them to graduate to higher service offerings as their needs grow."

A recent Aite report predicted full-service firms like Merrill will be the fastest-growing segment of digital advice over the next five years. UBS, HSBC and U.S. Bancorp have all launched direct-to-consumer digital advice services over the last year, and JPMorgan is preparing to launch one this year.

Mr. Levine said Merrill now manages $211 billion across its digital investing platforms.


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