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Merrill Lynch Lowers Max Advisory Fee to 2%

December 19, 2018

Wirehouse Merrill Lynch is dropping the top fees charged to its advisory platform clients for second time in two years, FA-IQ sister publication FundFire writes.

The maximum fees such clients will pay effective Jan. 1 will be 2%, according to FundFire. The current fee structure, effective since February 2017, sets the maximum at 2.2% for accounts with less than $5 million and 2% for those with more than $5 million, FundFire writes, citing Merrill Lynch’s March ADV.

Now, the max fee will be 2% regardless of the account size, a spokesman for the wirehouse confirms to the publication.

The drop in 2019 is “part of a broader set of strategic enhancements to the program and its pricing, which began about two years ago,” the spokesman tells FundFire. But it also goes in line with fee compression across the wealth management industry as a whole, Andy Klausner, founder and principal of AK Advisory Partners, tells the publication.

“Fees have been coming down in the past 10 years,” he tells FundFire. “Programs used to have a maximum of 3%, so they’ve definitely been coming down over time. [These firms] never really charge the maximum, so why not just state that?”


While it’s pushing maximum fees down, Merrill Lynch has also been increasing demands on its advisor force. Some advisors at the wirehouse have in fact complained that the 2018 compensation plan already pushes them to convince clients to take on more debt, for example.

And under the recently unveiled compensation plan, Merrill Lynch’s advisors will have to meet certain targets just to keep their pay from getting slashed.

By Alex Padalka
  • To read the FundFire article cited in this story, click here if you have a paid subscription.