of Merrill Lynch Wealth Management, in
a note to advisors. “In response, we’re
implementing modifications to limit your
downside while preserving the upside.”
For instance, advisors need to add one
new household credit by June 30 to pre-
vent their pay from being trimmed by 1%;
earlier in the year, this figure was two.
Over the full year, this target now stands
at three credits vs. four earlier in 2020.
In 2019, the target was six householdcredits, which were awarded as follows:For client assets of $250,000 to $2.5 million, 1 credit; $2.5 million to $10 million,2 credits; $10 million to $25 million, 3credits; and over $25 million, 4 credits.
Advisors hit with a “growth grid”reduction in June can choose to push thispay cut back until Dec. 31, 2020. “Thischange allows you to avoid any near-termcash flow reduction and offers the opportunity to ‘course correct’ through theremainder of the year,” Sieg explained.
In March, Merrill Lynch pushed backits requirement that advisors have atleast 30% of client households in threedifferent financial programs to qualifyfor the enhanced team grid incentiveprogram from July 1, 2020, to Jan. 1, 2021.
According to Sieg, Merrill’s 2020growth grid “retains all upside awardsoriginally communicated in which anadvisor may achieve up to a +3% cash gridaward for the achievement of stretch hurdles in gained households and net flows.”The firm says its advisors continue toadd about 1,000 new client householdsper week.
Also in June, Merrill Lynch said its advisors and client associates are getting newworkstations. The Client Workstations, orCEWs, can be used to manage multiple clients at the same time, the firm says, adding that the platform has improved searchand navigation abilities, along with otherfeatures to help remote and mobile users.
Also, the new Merrill technology
includes Book 360, a dashboard with
details on each advisor’s full practice of
clients, metrics and priority items. The
development comes about 18 months
after rival Morgan Stanley introduced
WealthDesk, its new advisor platform.
“In this environment, any enhance-
ments that allow advisors to gain addi-
tional time to serve clients is extremely
valuable,” according to a Merrill statement.
The CEW platform has been in the
works for the past 18 months. It replaces
the Wealth Management Workstation
(WMW), which Merrill launched more
than a decade ago, and can be accessed
via a desktop, laptop or tablet issued by
“While investments have been made
in the platform and applications over
this period, the workflow, core technol-
ogy design and hardware requirement
had remained largely unchanged,” the
Advisors and associates started vir-
tual training for the new technology
in April and May. Some 5,500 Merrill
Lynch employees used them in a pilot
project late last year.
Merrill did not put a price tag on the
workstations but said they were part of
Bank of America’s $10 billion tech bud-
get, which includes about $3 billion
for new projects that aim to improve
Total client assets for Merrill Lynchwere $2.2 trillion as of March 31. At thesame time, the average 12-month feesand commissions per advisor were $1.14million, compared with $1.04 million inQ1’ 19 and $1.1 million in Q4’ 19.
This rival wirehouse says it plans to introduce an advisory 529 program later thisyear based on the goals-based approachof its Wealth Management unit, whichhas some 15,400 financial advisors.
Wealth clients who invest in theMorgan Stanley National Advisory 529Plan “will not pay brokerage charges orcommissions on their portfolios, but rather pay an advisory fee leveraging household pricing,” according to the wirehouse.
“This allows for differentiation from ourpeers. No one else has done this to date,”said David Rosen, head of TraditionalInvestment Products, Morgan StanleyInvestment Solutions, in an interview.
“The industry as a whole is movingto goals-based planning, and this [529product] ties in perfectly with that,”Rosen explained.
The North Carolina State EducationAssistance Authority will serve as theplan sponsor for this education savings program.
“There’s been increased legislationaround 529 plans in terms of K- 12 education, paying back student loans andother changes governing them,” saidRosen, leading to “growing interest” inthese savings vehicles.
For the new 529 program, wealthclients can choose between 11 differentmodel portfolios that invest in MorganStanley Pathway funds, which have outside investment managers.
The Pathway Large Cap Equity Fund,for instance, has a net annual operatingexpense of 48 basis points. Its prospectus also says the associated annual advisory program fees can be as high as 2%.
This yearly charge, though,“is determined ultimately by advisors and theirclients” as part of the wealth unit’s“overall relationship-based” (or fee-based) pricing, and many clients payless than 1% a year, according to Rosen.
Wealth clients seeking 529 plans onMorgan Stanley’s brokerage platform,where commissions are charged, havesome 20 plan options, he adds.
As of March 31, Morgan Stanley has15,432 advisors. Their average yearlyfees and commissions were $1.05 million, and average assets per advisor were$155 million.
Total assets for the wealth unit in thefirst quarter were $2.4 trillion, with fee-based assets at roughly $1.13 trillion.
Janet Levaux is editor-in-chief of InvestmentAdvisor. She can be reached at email@example.com.