Merrill trying to make managed-account platform adviser- and client-friendly

Bank of America Merrill Lynch is conducting a major revamp of its managed-account platform, intending to break through the traditional pricing silos and make its offerings more client-friendly.

In September, the firm will begin a pilot program with a handful of advisers to consolidate the front-end access to its five managed-money platforms by using just one contract and requiring one client signature for all managed programs.

And in a big change for advisers, pricing will be calculated at the household level.

Merrill advisers have long complained about pricing silos that have made it difficult to discount fees in one program, even though clients have large balances on another platform.

“The No. 1 thing I’ve heard from advisers is, they want to treat a client as a client regarding pricing,” said Lorna Sabbia, head of Merrill’s managed-solutions group. “So a client might have $10 million in a brokerage account, but a $500,000 Consults [separately managed account] is opened as a $500,000 account” and priced accordingly.

“It’s a convoluted process [for an adviser] to get that [pricing] right,” she added.

“We’ve been asking for relationship pricing for a long time,” said one Merrill adviser. “This should be better.”

Merrill will take into account all assets and liabilities clients hold at the firm to determine pricing, which starts at 270 basis points, down from 300 basis points currently for some managed offerings. Ms. Sabbia would not divulge detailed fee information, but she said advisers should have more flexibility to set fees competitively.

“I don’t know if this is a de facto fee increase” for clients, said another Merrill representative. “But it makes sense, to put everything on one piece of paper [with] one signature.”

Advisers at Merrill will be given calculators to analyze their own mix of business and “plenty of time to get acclimated,” Ms. Sabbia said.

She stresses that the three-year effort to streamline Merrill’s managed offerings will benefit clients at least as much as advisers.

“We want to make it intuitive, to speak in their terms [with] one contract, and one website” for the different programs, she said.

Clients get confused with the different names and features of each program, she said, and advisers spend too much time explaining the differences.

“Even in the contract language, we will speak in the language of our client, to the point where they say, ‘I get it,’” Ms. Sabbia said.

Model portfolios and re-balancing capabilities are also planned for the revamped platform.

The new system will support strategies for multiple clients and accounts, Ms. Sabbia said.

Advisers will also be able to group accounts to specific client goals, such as retirement or college funding.

The programs affected are Merrill’s traditional Consults SMA program, its adviser-run discretionary and nondiscretionary programs, its mutual fund wrap offering and the firm’s unified managed account.

The upgraded system will be made available to all Merrill advisers next year, with a full rollout targeted by the end of 2015.

The changes at Merrill were reported earlier by FundFire.