Merrill Edge says it has expanded its mass-affluent platform to include an ETF trading tool, and plans for more portfolio tools are in the works. Clients can trade ETFs online for $6.96, with 30 free online trades per month for some qualifying investors.
"This is part of our goal for Merrill Edge and especially for self-directed clients: Help them build portfolios with our capabilities around a selected list of ETFs and funds to choose from confidently and for good performance," said Alok Prasad, head of Merrill Edge, in an interview with ThinkAdvisor.
Bank of America (BAC) launched Merrill Edge three years ago. The program now has about 1.6 million clients; some are self-directed investors, while others work with Merrill Edge advisors, mainly by phone.
"We are at $87 billion in assets as of August, with strong, 17% momentum in year-over-year growth, and we want to grow further," said Prasad (right). "The Merrill Edge Select ETFs is part of our value proposition to make it easy and simple to invest with us."
The ETF platform was launched in late August. It includes 61 products from Vanguard, iShares, State Street and other industry leaders, organized into five broad categories and 21 subcategories. Clients can select ETFs and work to rebalance their portfolio with these products in conjunction with Merrill Edge's Asset Allocator Tool.
"It takes them through the process from start to finish," explained Prasad.
When picking the 61 ETFs for the platform, Merrill looked as assets under management, since the larger funds have greater liquidity and better pricing, according to Paul Riley, managing director of Merrill Edge Product Solutions.
Tracking error, expense-ratio measures and bid-ask ratio spreads were also examined. "This way, we could get the highest liquidity and lowest cost in each category … " Riley said, "and end up with a best-in-class group that's unbiased in terms of the sponsor firms."
