Who Will Serve the Underserved? The Big Brokers Don’t Want Clients With Less Than A Quarter Million $$$

It’s been a trend at the big brokerage firms since 2008: the focus on the on the multi-millionaire and billionaire client. At Merrill Lynch, management has increased its effort to discourage their brokers from dealing with clients under $250,000. It simply won’t give its brokers their usual percentage of the commissions these clients generate.

From Financial Advisor magazine:

Merrill Lynch told its 14,000 brokers on Wednesday they will get higher bonus payments in 2015 for attracting new clients and assets but eliminated pay for servicing clients with less than $250,000.

Because Merrill Lynch is now owned by Bank of America, it is encouraging its brokers to have their clients buy loans, banking and trust products, or put into fee-based advisory accounts. Merrill brokers get cash bonuses if they do this.

This can certainly lead to a conflict of interest. Merrill is one of a growing number of firms that don’t want the younger, less wealthy clients. That leaves a great opportunity for the independent RIA community who are able and willing to service this under served cohort.

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