As per reports by Reuters, Bank of America Merrill Lynch brokers won a battle to lower client fees on advisory accounts.
After almost a 2 year struggle to raise account fees for wealthy customers, Bank of America Merrill Lynch ultimately gave in to the retail brokers’ pressure. Reuters was the first to report the news. It is being said that almost two years ago the brokers were told by the bank they will compromise their pays if they destructively slashed fees on fresh accounts. This was presented as comprehensive part of efforts to reduce the discounts on fees.
Together with being irritating for consumers, the policies were also burdensome for the brokers. By increasing pressure from the brokers, the bank sent in internal memo to all its employees, providing flexibility by reducing fees by almost 15% or above on some accounts, Reuters reviewed the memo.
In the second half of 2013, Merrill Lynch presented Merrill One, which combined 5 traditional systems to 1; brokers were provided a specific time to transfer all the assets of clients by the end of current year. But almost 6 months before the given time, over 40% of the total transfer have not been made. As per Reuters, majority of the brokers waited for the last minute to transfer all the assets of clients that would cause the latest fee structure.
The evolution to the latest system was planned to simplify the management and billing system of the accounts. However, at the similar time, Brokers were need to do a huge amount of paperwork and were required to present the new fees structure to the clients.
On Wall Street, it has been more of a tendency that brokers make commissions from their customers on old roles as well as from yearly charges for their services that the clients receive. In this way, they are more concerned about the customer service and are not less interested in advising securities to the clients. According to reports, these firms make more money through yearly fees from clients for their customer services.
Just lately, Merrill Lynch witnessed a fine of around $11 million from United States regulators for the violation of various rules set by the federal. Bank of America’s Merrill Lynch was accused of utilizing imprecise data for short order sale. As per Securities and Exchange Commission, the company place shares for short order that were not obtainable and also used out-of-date information. There has been a report that the company used data which was approximately 24 hours old.
Bank of America Corp. stock was up 2.41% to $17.18 at market close on Friday June 5th.