Merrill Lynch Wealth Management and U.S. Trust: Serving the rich



Leading wealth manager

Bank of America (BAC) offers wealth and investment management solutions through its Merrill Lynch Wealth Management and U.S. Trust businesses. These are the two primary businesses of the bank’s Global Wealth & Investment Management (or GWIM) segment. GWIM contributes the most to the bank’s revenues after Consumer and Business Banking.

Bank of America’s GWIM segment controls the highest high-net-worth client assets, according to Barron’s 2013 ranking. The ranking is based on assets under management of accounts greater than $5 million. In this segment, the bank competes with JPMorgan Chase (JPM), Wells Fargo (WFC), and Morgan Stanley (MS), which all have strong wealth management operations. Other banks such as those in the Financial Select Sector SPDR ETF (XLF) have comparatively smaller operations in this space.

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The above graph shows the growth in Bank of America’s GWIM client balances over the years. Brokerage assets, which include nondiscretionary brokerage and fee-based assets, account for the biggest portion of client balances. GWIM doesn’t have the authority to trade nondiscretionary assets at its discretion. These assets can be traded only after the client consents.

Assets under the investment advisory and discretion of GWIM, called assets under management, form the second biggest chunk of client balances.

Customized services

Merrill Lynch Wealth Management caters to clients with more than $250,000 in total investable assets. This service offering includes understanding a client’s current financial situation and designing a customized wealth management framework that integrates all the client’s financial objectives. Its product portfolio includes a full set of brokerage, banking, and retirement products.

The Private Banking and Investment Group provides services such as investment management, concentrated or restricted stock management, and intergenerational wealth transfer strategies to ultra-high-net-worth individuals. Ultra-high-net-worth individuals are generally defined as those with investable assets of at least $30 million.

U.S. Trust provides comprehensive wealth management solutions to clients with investable assets of more than $3 million. Services include portfolio management, specialty asset management, estate plans, wealth transfer strategies, philanthropic strategies, custody services, custom credit, and other customized services. Custom credit includes solutions for acquiring specialty assets such as yachts, aircraft, fine art, restricted stock positions, and recreational real estate.

In the next part of this series, we’ll find out about Bank of America’s (BAC) investment banking operations.


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