With its 2019 compensation plan, Bank of America-owned Merrill Lynch Wealth Management will prod its advisors to get clients digitally engaged: specifically, the wirehouse will link advisor compensation to how often clients log into apps and online portals.

The 2019 compensation plan, unveiled at the beginning of November, requires that advisors’ clients log in at least once every 90 days to mobile or online portals in order for the advisors to earn client-engagement credits – worth 14 basis points (or one hundredth of one percent) on advisors’ production credits from clients’ checking and savings accounts.

A Merrill Lynch spokesperson noted that only 40% of an advisor’s client base must be digitally engaged and that more than half of the firms' clients already meet the logging in criteria.

“There are advisors that are mad about this,” says Danny Sarch, a recruiter and president of Leitner Sarch Consultants in White Plains, N.Y. “Anytime you link the Bank of America with the success or purpose of Merrill Lynch, it complicates the relationship. It’s really astonishing in today’s world, when broker-dealers are supposed to be moving in the fiduciary direction. It really surprised me,” he adds.

But Merrill Lynch moving in the direction of trying to bolster client usage of digital tools is not surprising, given the wirehouse’s recent test of a new iteration of a digital advice program that pairs robo and live advisors, according to a story published by FA-IQ’s sister publication Ignites, based on the wirehouse’s recent regulatory disclosure.

According to a Nov. 14 ADV form filed by Merrill Lynch and the Ignites story, the new program, known as Merrill Guided Investing With Advisor, is undergoing a pilot phase with a small group of internal employees.

Investors in the program will pay 40 basis points more than for digital-only services. Scott Smith, a director for Cerulli Associates, who recently authored a report predicting digital tools will continue to grow as a complement for traditional human advisors, has no trouble with Merrill Lynch – or other firms – prodding advisors to make their clients embrace the online world.


“I haven’t seen any compensation plans that have set unobtainable benchmarks,” Smith says. Merrill is simply “rewarding advisors to encourage client behavior,” he says, “These are gradual implementations. It’s not going to kill anybody.”