Review of Merrill Lynch Wealth Management 2021

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Updated on Thursday, October 7, 2021

Merrill Lynch Wealth Management is the branded name for the wealth management division of Bank of America Corporation. The division offers, among other services, investment advisory services to individual investors, including those who are high net worth individuals, as well as to businesses, pension plans and other institutions. The firm also acts as a broker-dealer.

The bottom line: Merrill Lynch Wealth Management, the advisory arm of the massive Bank of America Corporation, offers portfolio and wealth management to individuals and businesses.

  • Offers a wide range of investment programs
  • Has a robo-advisor option
  • Reports multiple disciplinary disclosures
Assets under management (AUM): $1,084,543,561,669
Minimum investment: No minimum investment overall, although some strategies may require one
Individual investor to advisor ratio: 49:1
Fee structure: A percentage of AUM, fixed fees, commissions
Headquarters: One Bryant Park
New York, NY 10036
Website:www.ml.com
Phone: 800-637-7455

All information included in this profile is accurate as of September 16, 2021. For more information, please consult Merrill Lynch Wealth Management’s website.

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Overview of Merrill Lynch Wealth Management

Merrill Lynch Wealth Management is the brand within parent company Bank of America Corporation that provides investment and wealth management services. Bank of America Corp. agreed to purchase Merrill Lynch and its over 16,000 financial advisors in 2008 in the depths of the financial crisis. The combined firms created the largest brokerage business in the country at that time.

However, each firm’s origins go back much further than that. Bank of America’s history traces back more than 240 years, while the Merrill brokerage shop opened its doors on Wall Street in 1914.

Today, Merrill Lynch Wealth Management’s investment advisory business is formally registered with regulators under the names Merrill Lynch, Pierce, Fenner and Smith Incorporated, as well as Managed Account Advisors, LLC. The former is licensed as a broker-dealer as well. The firm has over 36,000 employees, more than 27,000 of whom perform investment advisory functions.

Merrill Lynch Wealth Management’s pros

  • Broad menu of programs: The firm offers something for just about everyone. Clients can choose how involved they want to be in the management of their account, with the option of discretionary or non-discretionary accounts. They can opt for accounts with limited investment choices, a broad mix of individual securities and even alternative investments, and with third-party managers or Merrill managers.
  • Accessible nationwide: The firm provides registered investment advisory and broker-dealer services from nearly 3,000 offices around the country, giving it a national footprint. This makes it easier to meet in-person with your advisor, regardless of which region of the country you live in.
  • Access to internal research: To guide their investment decisions, financial advisors at Merrill Lynch Wealth Management can turn to the securities research and industry insights published by analysts, economists and researchers in the larger Bank of America Merrill Lynch network. BofA Merrill Lynch Global Research was named a top global research firm by Institutional Investor from 2011 through 2020.
  • A digital advisory program with or without an advisor: Clients who are comfortable using online tools that are looking for a low-cost program could consider the Merrill Guided programs. The robo-advisory tool charges 0.45% of assets under management, or 0.85% if you want a financial advisor to assist you in identifying your goals and suitable investment options.
  • National recognition: The firm’s advisors show up on many prominent best-of lists in the financial services industry, including Barron’s Top 1,200 Financial Advisors for multiple years in a row. In 2021, the firm had over 200 advisors recognized on the Forbes Top Women Wealth Advisors list.

Merrill Lynch Wealth Management’s cons

  • Difficult to determine fees in advance: While there are fee schedules for some programs, there isn’t a standardized schedule for all programs, meaning clients must spend the time shopping various financial advisors before they can learn how much they’ll pay.
  • Not every advisor offers each service: Advisors at Merrill Lynch Wealth Management don’t always offer every program or service available to clients. Clients must discuss with each advisor to learn the services provided by the advisor.
  • Potential conflicts of interest: The firm has a financial incentive to recommend its own products as well as funds that pay the firm the highest fee. The firm also stands to earn money when clients take out a loan against their account. Since many advisors are also registered as broker-dealers and insurance agents, they can also earn compensation by selling you specific securities and insurance products. This presents potential conflicts of interest, as advisors may be financially incentivized to make certain recommendations.
  • Pays for referrals: The firm compensates a handful of third parties to send prospective clients its way. The compensation typically comes out of the advisory fee paid by the client that otherwise would go to the advisor, for as long as the account remains open.
  • Long list of disciplinary disclosures: The firm discloses hundreds of disciplinary items, which is not unusual for a very large firm, but still worth noting. See more below.

What types of clients does Merrill Lynch Wealth Management serve?

The vast majority of the firm’s clients are individuals who do not have a high net worth. (For reference, the SEC defines a high net worth individual as someone with at least $750,000 under an advisor’s management or a net worth believed to be at least $1.5 million)

The firm does not have an across-the-board minimum investment requirement to open an account, though certain programs or investment strategies may require a minimum. For example, the robo-advisory account dubbed Merrill Guided Investing account requires a minimum of $1,000 for a strategy. On the other end of the spectrum, the Managed Account Service, which allows clients to choose their own preferred managers not available elsewhere through Merrill’s advisory program, requires a minimum of $100,000. The minimum for a Strategic Portfolio Advisor account goes all the way up to $2 million, although this requirement is negotiable, per the firm’s brochure.

Services offered by Merrill Lynch Wealth Management

Merrill Lynch Wealth Management provides investment management and wealth management services through many different programs. At the most basic level, the Merrill Guided Investing robo-advisor program offers clients the option to receive virtual help with setting goals and managing their portfolios.

Clients interested in having an in-person relationship can look to the more traditional Investment Advisory Program, where a dedicated financial advisor helps clients determine their goals and can manage their investment portfolio using a broad mix of potential investments. The firm also features programs that give clients access to third-party investment managers, who can be identified by a client’s financial advisor or chosen independently by the client.

Finally, the team is also registered as broker-dealers. Advisors can recommend specific investments or transactions but are compensated per trade, instead of by an annual fee based on the client’s assets under management.

Here is a full list of services offered:

  • Investment advisory services/portfolio management
  • Wealth management
    • Retirement planning
    • Trust and estate planning (advisors can share resources available through Bank of America)
    • Education planning
    • Charitable planning
    • Business planning
    • IRAs and 401(k) rollovers
  • Insurance/annuities
  • Pension consulting services
  • Selection of other advisors
  • Brokerage services

How Merrill Lynch Wealth Management invests your money

Clients of Merrill Lynch Wealth Management can choose to give their advisor discretionary authority over their account, meaning the advisor chooses the investments based on the client’s goals and situation and handles the day-to-day activity in the account. Advisors can create custom accounts or choose managed strategies. Alternatively, clients can choose to get guidance from their advisor about what investments and managers may work for them, and then the client can make the final decisions around how to invest their money, which is a non-discretionary arrangement.

When starting a relationship with a dedicated advisor, clients will share their personal and financial goals and objectives, risk tolerance, time horizon and other key details. The advisor works with the client to choose specific target asset allocations. Typically, clients choose one or multiple, depending on their number of accounts, of the firm’s nine offered asset allocations:

  • Conservative
  • Moderately conservative
  • Moderate
  • Moderately aggressive
  • Aggressive
  • Equity-focused
  • Fixed income-focused
  • Alternative investment-focused
  • Custom allocation

Specific investments recommended may include:

Not all strategies will have access to the same investments. For example, the online Merrill Guided Investing programs offer only a limited number of Merrill-managed strategies that invest in mutual funds, cash and ETFs.

Fees Merrill Lynch Wealth Management charges for its services

Most of Merrill Lynch Wealth Management’s programs charge an annual fee calculated as a percentage of assets under management. The fee is negotiated directly with each advisor, and largely depends on the program and the amount of money the client has invested with the advisor (some programs have account minimums).

Certain programs have standard fee schedules, as shown in the tables below:

Merrill Lynch Wealth Management Program Fee Schedules
Program nameAnnual fee
Merrill Guided Investing0.45%
Merrill Guided Investing, with the help of a dedicated advisor0.85%
Merrill Lynch Wealth Management Fee Schedule for Strategic Portfolio Advisor Service
Dollar value of assetsMaximum annual fee for equity/balanced/convertible/REITMaximum annual fee for fixed income
Up to $4.99 million1.50%0.70%
$5 million to $9.99 million1.00%0.60%
$10 million to $14.99 million0.85%0.50%
$15 million to $19.99 million0.75%0.45%
$20 million to $24.99 million0.70%0.40%
$25 million to $49.99 million0.60%0.40%
$50 million or greaterDetermined by mutual AgreementDetermined by mutual agreement
Merrill Lynch Wealth Management Fee Schedule for Managed Account Service
Dollar value of assetsMaximum annual fee for equity/balanced/convertible/REITMaximum annual fee for fixed income
Up to $1 million1.80%0.65%
$1 million to $1.99 million1.35%0.65%
$2 million to $4.99 million1.35%0.50%
$5 million to $9.99 million1.00%0.45%
$10 million or greaterDetermined by mutual agreementDetermined by mutual agreement

The fee typically serves as a wrap fee, meaning it covers the advisory, brokerage and custody costs. When advisors use other brokerage firms to place transactions, the client may pay a transaction charge. Clients also are responsible for internal fund fees.

Fees are generally paid in advance, either quarterly or monthly.

Merrill Lynch Wealth Management disciplinary disclosures

Merrill Lynch, Smith, Fenner and Pierce, the registered name of the advisory and broker business, discloses hundreds of pages of findings against it, its predecessor firms and select affiliated individuals. The SEC requires all registered investment advisors to disclose in their Form ADV paperwork any legal or disciplinary actions taken against the firm, its employees or its affiliates over the last 10 years that would be material in evaluating the firm or its management team. It should be noted that large firms such as this one often have disciplinary disclosures.

The firm, which self-reported some of these issues, settled with the SEC, FINRA and state regulators in many cases without admitting or denying the allegations. The settlement accusations include:

  • 2020: The SEC found that, from Jan. 1, 2014 to May 31, 2018, the firm failed to disclose the conflicts of interest related to its receipt of 12b-1 fees and/or its selection of mutual fund share classes that pay such fees. Ultimately, the firm accepted a censure, the imposition of a cease and desist order and a disgorgement of $297,394 and prejudgment interest of $27,982 to be paid to investors.
  • 2018: The SEC found the firm had failed to disclose a conflict of interest related to the process used in a termination recommendation for a portfolio manager. The penalty levied was approximately $8.8 million.
  • 2014: The firm settled FINRA allegations, without admitting or denying them, that it failed to ensure certain sales charges were waived for clients who purchased certain mutual funds’ Class A shares in some retirement and brokerage accounts. The firm paid an $8 million fine and agreed to additional reimbursements for impacted clients.
  • 2012: The firm paid a $2.8 million fine in a settlement with FINRA, without admitting or denying the findings, in relation to allegations that the firm did not adequately supervise the billing process and overcharged certain clients from 2003 to 2011. It was also alleged that the firm did not send trade confirmations to certain clients in 1 advisory programs, among other issues. All overcharged accounts were reimbursed.

For more information on the firm and its disciplinary history, visit Merrill Lynch Wealth Management’s IAPD page.

Merrill Lynch Wealth Management onboarding process

  1. Find an advisor near you: To learn if there is a Merrill Lynch advisor near you, you can use this search tool provided on the company’s website. It requests information including your location, what you need help with and what designations you’d like your advisor to have. You can also fill out this contact form to have an advisor get back to you. You could also choose to call the firm at 866-706-8321.
  2. Sign an agreement: Once clients decide they want to move forward with a particular advisor, they must sign a written agreement that lays out the services the advisor will provide and what they’ll charge.
  3. Discuss your goals and portfolio strategy: The advisor works with you to understand your goals and determine your optimal asset allocation, and to select strategies and investments.
  4. Access your advisor as needed: You’ll be able to access your advisor when needed in order to get advice or adjust your plan.
  5. Have regular check ins: In the traditional investment advisory program, advisors check in with clients at least annually to review their accounts.

Where Merrill Lynch Wealth Management is located

Merrill Lynch has nearly 3,000 offices across the U.S. You can go to the advisor locator on their website to find out if there is an office located near you.

The state has jurisdiction in all 50 states with the exception of Arizona, Massachusetts and Oregon. Additionally, it is registered to serve investors in the District of Columbia and the Virgin Islands.

Is Merrill Lynch Wealth Management right for you?

The Merrill brand has a vast network of thousands of advisors. Thus, clients starting a search for a local advisor may find one of the team’s 27,000-plus advisors in their area.

As for the firm’s specific offerings, clients will find a broad menu of program offerings that allow clients flexibility in how they want to interact with their advisor. For example, clients can choose to hand over control of their account to their advisor, or they can opt to retain the day-to-day decision making. They can stick with a limited number of strategies managed by Merrill professionals, or branch out into other individual stocks and bonds, third-party portfolio managers and even alternative investments.

Potential clients should make a point to discuss fees with their advisor, since they are often negotiable and can vary for similar services from advisor to advisor. Also, clients should be sure to ask how the advisor earns money for the products they recommend, since they may earn compensation for selling certain investments and thus have a potential conflict of interest. Additionally, not every advisor offers each service or investment, making it important for potential clients to find out upfront what an advisor does and does not offer.

Before you make your decision, be sure to research multiple firms to ensure you find the right advisor for you.

The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.