Unlike rival wirehouse Wells Fargo, which is trying the RIA waters, Merrill Lynch intends to grow its wealth management business by closer integration with their parent bank, according to news reports.
Wells Fargo Advisors recently revealed plans to look into establishing an RIA, but Merrill Lynch “has no intention of moving in that direction,” Andy Sieg, head of Merrill Lynch Wealth Management, tells WealthManagement.com.
Merrill Lynch is instead looking to further integrate with parent company Bank of America to establish a one-stop shop offering financial planning and banking all in one place and catering to clients across the the wealth spectrum, Sieg says, according to the web publication.
“We watch, of course, the industry dynamics very closely, but our conviction is this integrated strategy is very powerful,” Sieg tells WealthManagement.com.
Sieg also doesn’t believe, as many critics of this approach claim, that integration between banking and wealth management would lead to cross-selling of the companies’ proprietary products, according to the web publication.
He also insists customers have come to expect one firm to offer more than one service in other industries, WealthManagement.com writes.
Grocery chains now have pharmacies while Facebook now offers messaging and an online marketplace, according to the web publication.
Younger clients in particular are more open to one institution handling the bulk of their financial life, while nine out of 10 Americans would prefer their advisors to look at their financial lives in totality before offering advice, Sieg said at a Barclays Financial Services conference this fall, according to WealthManagement.com.
“I think, for many of our clients and customers, they’re just beginning to recognize how easy this can be, and how much time they can save, and how much better they can sleep at night, and now that they’re experiencing it, they’re asking for more,” he tells the web publication.
Both Merrill Lynch and Bank of America stand to win from a push into further integration: Currently, only 6% of Bank of America’s seven million affluent households, which have between $250,000 and $1 million in liquid assets, also have investments with Merrill Lynch, according to the bank, WealthManagement.com writes.
Meanwhile, clients of the bank’s Global Wealth and Investment Management, which along with Merrill Lynch also includes U.S. Trust, have around $200 billion in deposit balances sitting outside of Bank of America, according to the web publication.