Bank of America is “absolutely” considering creating a subscription service for its Merrill Edge service, potentially making it the second major Wall Street player to offer clients a nontraditional way to pay for wealth management services.
“Clients are simply getting used to paying to subscriptions. It’s a logical next step. It’s just a question of getting the pricing right,” says Teron Douglas, head of digital capabilities at Merrill Edge, who was speaking at SourceMedia’s In|Vest conference in New York.
Douglas, who was responding to an audience member’s question, notes there’s precedence for such a move, observing that Schwab and some fintech firms have already put forward such offerings.
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Bank of America, meanwhile, has been expanding its range of wealth management offerings. In June, the company added a digital-plus-human-advisor option dubbed “Merrill Guided Investing with an advisor.” The bank already offered a DIY platform (Merrill Edge), a robo advisor (Merrill Edge Guided Investing) and its traditional Merrill Lynch financial advisors.
The new digital-plus-human offering has a $20,000 account minimum and charges an annual fee of 0.85%, compared to a $5,000 minimum and an annual fee of 0.45% for the purely digital version. Discounts are available for members of Bank of America’s preferred rewards program.
A subscription model could resemble what cable companies offer: a basic plan with options to add more services as clients need or want — for a fee, of course.
