Merrill Lynch Segments Financial Plans

Merrill Lynch is revamping its Financial Foundation financial plans, creating three more comprehensive versions tailored to match an investor's needs. Vincent Tarduogno, director of financial planning at Merrill, calls the new versions hybrids between the existing Financial Foundation plan and an exhaustive private plan Merrill offers its ultra-high-net-worth clients. The plans will be piloted toward

Merrill Lynch is revamping its Financial Foundation financial plans, creating three more comprehensive versions tailored to match an investor's needs.

Vincent Tarduogno, director of financial planning at Merrill, calls the new versions hybrids between the existing Financial Foundation plan and an exhaustive “private plan” Merrill offers its ultra-high-net-worth clients. The plans will be piloted toward the end of 2001, he says.

The three versions of Financial Foundation were designed for Merrill's three new classifications of brokers based on client assets (see May 2001 RR, Page 30).

“We are looking at essentially three versions of a comprehensive plan to address different segments of our client base,” Tarduogno says. “But it is more market-driven than broker-driven.”

Reps heard about the financial plan overhaul during a million-dollar producers trip to Hawaii in April. According to a broker who was there, the new plans could cost between $750 and $1,000, compared with $250 for the basic version. However, Tarduogno says pricing is still being determined.

Like the existing 100-page report, each revamped plan will be delivered in a three-ring binder, known by brokers as a “blue book.” An electronic version, called the Interactive Financial Foundation, can be updated as the client's financial picture changes.

The current Financial Foundation is not comprehensive or forward-looking enough for investors with $5 million or $10 million, the rep says. “It really doesn't offer a lot of information on the trusts a client might consider, or how they could fund that trust.”

The new plans are designed to be more complete. “They will have more planning tools and more sophisticated information on trusts and generational transfers,” the broker says. “They should help us attract those higher-net-worth clients they want us to bring in.”

Although Merrill has eliminated quotas on doing plans for all brokers except trainees, it still considers the service a staple of its business.

Tarduogno says 60% of the individuals who purchase a Financial Foundation plan open a brokerage account at Merrill within the same year, bringing an average of more than $250,000 to the firm.

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