Merrill Lynch has launched its Merrill Lynch Financial Advisory Center.
Merrill Lynch has just publicized its addition of a new service to its client offerings. The Merrill Lynch Financial Advisory Center, which focuses on existing Merrill Lynch clients with portfolios worth $100,000 or less, gives customers access to their financial services provider using either the telephone or a website. Trades are then charged at $100.
In an effort to maintain its reputation as a major player among high net worth financial services providers, Merilll hopes to switch its financial consultants, who no longer have to focus time on less profitable portfolios, to increasing the quality of service for wealthy consumers. However, the move risks damaging the firm’s reputation.
Merrill seems to be trying to switch its less opulent clients to a more cost-effective channel at the wrong time. Recent stock market volatility has led to investor uncertainty and unease. Customers who have chosen Merrill Lynch, even those within lower wealth bands, sought the company over cheaper, more technologically advanced asset managers, because of the firm’s reputation for service. Initiating a remote-access channel financial program at the moment looks like an unwise strategic move, when consumers will seek the advice of their investment professional more than ever.
Merrill states that the program’s clients are only those that choose to enroll in it – but it doesn’t look likely that a significant number of customers, who chose Merrill for its service in the first place, will sign up, especially considering that the program’s price per trade towers over discount brokers such as Charles Schwab, who only charge $29.95.
The success of asset managers, investment companies and brokerages during a time of such erratic market movement is going to be determined by how close current endeavors resemble the reputations companies have been built upon. The Merrill Lynch Financial Advisory Center seems to be a lone path into the woods deviating from Merrill’s past road to success.
