Merrill Lynch expands free trades for majority of online clients

Bank of America does away with limits on free trades for many during industry price war.
OCT 21, 2019
Joining the race to eliminate commissions for online stock trades, Bank of America Corp.'s Merrill Lynch unit is tossing out limits for free trades for certain clients who use online or mobile platforms. The bank on Monday said it was expanding its zero-dollar online trades, offering unlimited and commission-free stock, exchange-traded fund and option trading to clients with a Bank of America checking account and at least $20,000 in cash or securities who are part of its "preferred rewards" program. Prior to this, those customers had a limited number of free trades each month; the minimum was 10 and maximum 100. [Recommended video: Aaron Klein: New tools will help investors trade through the Riskalyze lens] That program currently has about 6 million clients, but another 4 million could immediately qualify, said Aron Levine, head of consumer banking and investments at Bank of America. He said Merrill Lynch started offering zero-dollar trades to certain clients in 2006 and has steadily expanded the program since then. Meanwhile, customers who use the online brokerage platform, Merrill Edge Self-Directed, who are not registered in the preferred rewards program will see prices for online stock, ETF and options trades cut from $6.95 to $2.95 with no minimums. "Eighty-seven percent of trades are free with online and mobile," said Mr. Levine. "More importantly, we've been looking at this for years. It's not a purely investment-focused relationship with the client but one across banking, lending and investing." Charles Schwab Corp. was the first to make the move to erase commissions on certain online trades at he start of this month. It was quickly followed by TD Ameritrade Holding Corp., E*Trade Financial Corp. and Fidelity Investments. Although it may have been widely expected, Schwab's move has clearly shaken up the financial advice industry. Whiles trading has become a commodity for many brokerage firms, commissions from trading are still a significant piece of revenue for some broker-dealers.

Latest News

Fiduciary failure: Ex-advisor who sold practice fined after clients lost millions
Fiduciary failure: Ex-advisor who sold practice fined after clients lost millions

A former Alabama investment advisor and ex-Kestra rep has been permanently barred and penalized after clients he promised to protect got caught in a $2.6 million fraud.

Why the evolution of ETFs is changing the due diligence equation
Why the evolution of ETFs is changing the due diligence equation

As more active strategies get packaged into the ETF wrapper, advisors and investors have to look beyond expense ratios as the benchmark for value.

Most asset managers are using AI, but few let it call the shots
Most asset managers are using AI, but few let it call the shots

Survey finds AI widely embedded in research and analysis, but barely touching portfolio construction or trade execution.

LPL, Raymond James score fresh recruits in advisor recruiting battle
LPL, Raymond James score fresh recruits in advisor recruiting battle

Two firms land teams managing more than $1.1 billion in combined assets from Kestra and Edward Jones.

Edward Jones facing more race bias claims in new lawsuit
Edward Jones facing more race bias claims in new lawsuit

A private partnership, Edward Jones is a giant in the retail brokerage industry with more than 20,000 financial advisors.

SPONSORED Are hedge funds the missing ingredient?

Wellington explores how multi strategy hedge funds may enhance diversification

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management