Bank of America is planning to hike fees for thousands of customers at its Merrill Lynch brokerage arm as part of overhaul of the way it charges for its account-management services, the Wall Street Journal reported.
As part of a US$100 million platform overhaul, Merrill Lynch customers may end up paying as much as 50% a year more in fees.
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The main increases will be felt by clients with money in a platform known as Merrill Lynch Personal Advisor, or MLPA, which has some US$152 billion under management, or almost a third of all client money on managed platforms.
The current fee schedule for MLPA’s equities section sets a minimum fee of 1% for clients whose accounts hold up to US$1 million and 0.65% for accounts of US$1 million to US$2 million.
Under the new schedule, which uses a more precise scale, the minimum will be 1.6% for accounts up to US$250,000, 1.4% for US$250,000 to US$500,000 and 1.3% for US$500,000 to US$1 million. For US$1 million to US$2 million accounts, the minimum is 1%.
Advisors will have to change their fees by the end of 2015, the report added.
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By GlobalDataThe planned fee changes have upset some of Merrill’s 14,000-plus advisers, who are worried that higher costs may drive clients away and reduce their ability to charge less to their best customers, the report added.
