Merrill Lynch Seeks to Boost Merrill Edge Referrals With New Bonus Program
Bank of America Merrill Lynch wants its brokers to refer customers to its other products, including Merrill Edge. As a result, the firm is overhauling how it rewards brokers.
Citing a memo sent to advisers, Dow Jones Newswires reported that a change is coming to Merrill Lynch's compensation plan in 2018. Under the new plan, brokers can earn extra cash if certain criteria are met, including referring at least two customers to other Bank of America Merrill Lynch products such as Merrill Edge, its online self-directed investing platform.
According to the report, starting in 2018, brokers can earn up to an additional 2% in pay if they have 5% year-over-year growth in new assets and liabilities and add five new wealthy households and two super-wealthy households during the course of the year. However, in order to be included in the program, the brokers have to refer two or more clients to other products such as Merrill Edge. Brokers who meet the criteria but fail to refer two clients to other services will not be eligible for the pay hike of up to 2%.
[Looking for a reliable broker? Take a look at Investopedia's online broker reviews first.]
The move on the part of Bank of America Merrill Lynch to include customer referrals in its bonus incentive comes at a time when all of the major investment firms are eyeing the robo-advisor market as the next bastion of growth. With low-cost, self-directed investing resonating among all types of investors, particularly millennials, Wall Street is responding by launching online services.
Merrill Edge has been around for a decade now, but last February, the company launched its Merrill Edge Guided Investing online advisory platform, which provides expert advice along with the ability to invest online. In a recent interview, Aron Levine, head of Merrill Edge, said that the DIY online trading business has $166 billion in assets and more than 2.3 million accounts. What's more, he said a survey conducted by the financial firm found that one in eight Americans, or 13%, are using a robo-advisor or would consider using one. That increased to 22% when millennials were polled. Those that use an online platform to invest said that it makes them feel more empowered, investment savvy and knowledgeable.
With millennials becoming an important revenue generator for Wall Street, Wells Fargo & Company (WFC) has also entered the robo-advisor space. Earlier this week, the embattled San Francisco-based bank announced the nationwide launch of Intuitive Investor, an online investment platform that blends technology with human advice to give customers access to low-cost investing. With the new robo-advisor platform, customers can go it alone or get advice from Wells Fargo Advisors.