WealthManagement Magazine

Merrill Experiments with Turning Over Small Accounts to Service Bureau

Merrill Lynch has begun a pilot program to encourage brokers to turn smaller accounts--$50,000 or less--over to a centralized service bureau at the firm, according to several brokers.The program has not been rolled out in all Merrill offices, reps say. Under the program, administrative personnel at the firms central service bureau will handle these clients service requests. The office mails these

Merrill Lynch has begun a pilot program to encourage brokers to turn smaller accounts--$50,000 or less--over to a centralized service bureau at the firm, according to several brokers.

The program has not been rolled out in all Merrill offices, reps say. Under the program, administrative personnel at the firms central service bureau will handle these clients service requests. The office mails these smaller clients Merrill Lynch research and follows up with a phone call inquiring if they have an interest, according to one broker. Clients are given a central number to call with questions, but they dont have a regular contact at the bureau, according to another rep.

Theres nothing that says you have to get rid of the smaller accounts, a West Coast Merrill rep says, adding that the firm definitely wants its sales force to target larger accounts. This is an experiment. ... A lot of guys have 25% of their book that hasnt done any business in years--put those in the service office to handle them.

You can make a case to retain certain accounts, says a rep on the East Coast. Merrill wont force brokers to turn over accounts, he adds. The firm has never been irrational in introducing new programs.

Merrill is claiming that the satisfaction rating for these clients goes up, the West Coast broker reports. Clients like those calls, and it gives them a feeling of attention ... If [the client] starts doing business again, theyre given back to the broker.

Merrill would not comment on the service-bureau program.

Reps arent too concerned about losing these clients. In fact, its good business to standardize services for these smaller accounts, a third Merrill rep says. We cant afford to offer the $50,000 client the same level of services that we offer the $1 million client. Plus, the $1 million client tends to have a better understanding of basic investment principles and therefore often takes less time, he adds.

But the West Coast rep notes one possible problem: So many small accounts are people related to bigger accounts--like referrals--you dont want to tell your clients that you tossed the others out.

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