Welcome to Financial Advisor IQ

Merrill Edge Offers Enhanced Research Amid Rising Robo Stakes

By Thomas Coyle November 13, 2017

Merrill Lynch’s online platform Merrill Edge today debuts a tool to help self-directed clients make more informed decisions about thousands of individual stocks in the context of each investor’s overall portfolio. The enhancement — described officially by Merrill as “a new stock-research experience” and known to insiders at the firm as “stock stories” — is part of a push begun early this year to broaden support for Merrill Edge clients, whether wholly do-it-yourself, guided by in-house professionals or something in between.

Functionally, Merrill Edge’s stock stories comprise a research component of its Investing and Trading platform, which is intended for self-directed investors.

“People have access to more information about stocks than ever before,” says Cory Triolo, head of digital-client experience at Merrill Edge. “We wanted to make sure we took an approach centered on what’s important: Is a given company the right investment for your strategy?”

Triolo says stock stories took a few years to formulate in a procedure that involved checking with clients to make sure all content follows the dictates of behavioral finance, adheres to an intuitive design and makes sense to the layperson.

“The plain-English aspect is the product of a long development process,” says Triolo. “We put a lot of different models and approaches in front of clients and asked what we could do to help them understand each aspect.”

For instance, stock stories don’t just refer to, say, an equity’s price-to-earnings ratio; they also explain the concept of P/E ratios clearly, in context and without condescension.

“These guys don’t have to go out and try to raise a zillion dollars; they just have to fire up the buggy.”
Bevin Crodian
Fincastle Consulting

Merrill Edge stock stories draw on tools and analytics from Morningstar, MSCI (particularly its environmental, social and governance ratings), Recognia, Trefis, Thomson Reuters, First Call, CFRA, S&P Global and — not to leave out the in-house component — Bank of America Merrill Lynch Global Research.

Charlotte, N.C.-based Bank of America is Merrill’s corporate parent.

The rollout of stock stories coincides with stepped-up public-facing support for Merrill Edge Guided Investing — MEGI for short — originally launched last winter.

MEGI provides investors with “access to strategies that are built and managed by the Global Wealth and Investment Management Chief Investment Office, rather than algorithms, to help clients set, pursue and achieve their financial goals,” according to a press release put out by Bank of America in February 2017.

In other words, MEGI is a cross between a robo — a term Merrill’s PR folks don’t like — and a managed account platform.

And now Merrill Edge is running TV spots, like this one, in support of MEGI, which sits at the middle of Merrill Edge service tiers between Merrill Edge Investing and Trading and its higher-touch Merrill Edge Advisory Center, which provides advice through dedicated Merrill Edge FAs — Merrill calls them “Financial Solutions Advisors” to distinguish them from advisors on its traditional brokerage platform — at call centers and walk-in locations.

Investors with more complex needs — and, at least notionally, more money — can turn for help to Merrill Lynch Wealth Management, the traditional, full-service platform just mentioned, or to U.S. Trust, Bank of America’s white-shoe business.

Wealth industry expert Bevin Crodian sees Merrill Edge — which manages $170 billion in 2.3 million accounts — as a prime example of the “robo revolution” taking place in wealth management.

Bevin Crodian

“It’s a revolution all right, but it’s not turning out to be revolutionary in the way the early robos envisioned,” says Crodian, who runs FINcastle Consulting in West Chester, Pa.

While robos that began in the last decade or so — outfits like Wealthfront, Betterment and Personal Capital — originally billed themselves as cutthroat dis-intermediaries of flesh-and-blood advisors, they’ve since seen fit to hedge their bets with “institutional” offerings for brick-and-mortar advisors looking to provide clients with better DIY services and mobile access.

Meanwhile, says Crodian, big names like Fidelity and Schwab have come to the fore as incidental robos with Merrill, which rolled out its Edge platform as a snazzier call center shortly before the robo mania took hold a few years ago, setting the pace for wirehouse-sponsored robos.

“From the consumer’s perspective, robos provide a tremendous service, but why not get something very similar from a trusted name like a Fidelity, Schwab or Vanguard — or at the call center of a wirehouse?” asks Crodian. “After all, unlike the pure robos, these guys don’t have to go out and try to raise a zillion dollars; they just have to fire up the buggy.”