Bank of America wants to remind everyone that Merrill Lynch is more than just a sideshow. Trying to move beyond the lawsuits and congressional hearings, BoA will finally start using Merrill for what it intended when it bought the beleaguered investment bank in January: to develop wealth management products.
BoA on Monday introduced the first product that uses Merrill's investment management capabilities and the overall firm's banking capabilities. The "My Retirement Income" offering lets customers nearing, or in, retirement automatically transfer, monthly or quarterly, funds from a Merrill cash management account into a BoA deposit account.
The product is not unique, but it adds competition to the retirement planning market and is a tangible advance in the much-maligned integration of the two companies.
"This is a very important step as we tie two parts of this organization together," said Andy Sieg, the head of retirement and philanthropic services in the Merrill Lynch unit, who was hired recently from Citigroup. "We are really bringing out what was the vision of the merger from the beginning."
Many companies, specifically insurance providers, have been introducing products in recent years that offer withdrawal benefits during retirement. Investment companies, including Fidelity Investments, began to introduce retirement income products as many as five years ago to retain customers-and their assets-after retirement.
Sallie Krawcheck, hired in August as the $2.39 trillion-asset company's head of wealth management and brokerage operations, has identified retirement products as an area of growth, calling the business "a hidden gem" for BoA. "You don't hear much about it, but you will be hearing more about it," she promised.
Sieg agreed, saying that developing a stronger array of retirement income products has been a "central element" of Krawcheck's strategy.
"Customers are very interested in a product that offers them a paycheck into the retirement years," he said. "This is really banking and wealth management working in concert together. We are not just blending them into the same account, which we know from experience can just be confusing for customers."
The new product "harnesses the full capabilities of the entire company," Sieg said. My Retirement Income works with existing Merrill Lynch retirement income products that the company has been developing for about two years.
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