Almost a year after spending $700 million ($1.3 billion Canadian) to acquire Midland Walwyn, Canada's largest independent broker/dealer, Merrill Lynch has begun to flex its muscle in the Canadian marketplace.
In May, the firm began rolling out Canadianized versions of its familiar product line, including the Cash Management Account and Asset Partner program (the Canadian version of the U.S. Asset Power program). Both products were marketed initially to existing Midland clients before last month's national rollout.
"This was a pretty difficult task, but we have consolidated, rebranded and brought Merrill up here with some attractive new features," says Bill Packham, Merrill Canada's chief operating officer and head of its private client group. "Now it's just a question of getting those products to potential customers."
Packham also says that online trading will be available in Canada by 2000, as well as a discount broker program.
Although Midland Walwyn already offered a CMA-type account, the older product was judged to be somewhat cumbersome by Merrill executives. For one thing, it didn't provide enough ready access to cash. The new version will be marketed on the strength of Merrill's debit card and the ability to write checks in Canadian and U.S. funds.
Similarly, Merrill's Asset Partner Program, which allows clients to pay an annual fee based on the value of their accounts, has been structured to compete directly with similar programs at Canada's leading bank-owned brokers, Packham says. Merrill, which could not utilize the Asset Power program name in Canada because it had already been trademarked by another banking firm, plans to offer more commission-free trades than Merrill's bank-owned competitors.
Both products will be supported by national print and television advertising that began in July and marketed through the firm's 116 offices.
Additionally, Merrill is continuing an alliance that existed between Midland and Laurentian Bank, a mid-sized commercial lender. Laurentian will offer Merrill's CMA and Asset Partner accounts to its own high-net-worth clients, along with a co-branded Visa card.
Developing new Canadian clients is critical to Merrill's success because, by most estimates, the New York-based firm paid top dollar for Midland's retail sales force of about 1,300 brokers. Merrill plansto expand the number of reps to 2,000 in the next three years.
Yet, in terms of its retail competition, this could be a good time for Merrill in Canada. Recently failed mergers among the largest brokers have left the retail growth strategies of some firms in disarray--and have caused dissatisfaction among brokers.