Hoping to Make up for its late entry into the increasingly crowded online trading world, Wall Street stalwart Merrill Lynch (NYSE: MER) announced today plans to offer an array of new personal financial services on the Internet. Coming next month are a selection of personalized services from Merrill Lynch financial consultants, and later this year the company will add self-directed Web investing.
“We believe we are creating a comprehensive framework that will revolutionize the concept of personal financial services in America,”‘ Chairman David H. Komansky said.
Whether the company’s “better late than never” arrival will impact its ability to compete in the highly competitive online financial market remains to be seen. Merrill Lynch will be battling nearly 100 online investment services that have already established Internet presences and, in the case of top online trading site E*Trade, accumulated more than one million customers.
One Fee, Total Access
The online Merrill Lynch customer will have the option of paying one annual fee for all of the company’s services or paying for online trading services per transaction. The annual fee plan requires no per-trade commissions, and the fee is calculated based on the customer’s household assets. To encourage active investing, as the customer’s assets grow the annual fee will shrink, as low as the minimum annual fee of $1,500.00 (US$).
With that account, customers have access to Merrill Lynch financial consultants, including regular portfolio performance reviews, unlimited trades via the consultant, the telephone or the Internet, links to dozens of e-commerce companies and a Visa Signature card with its point-accrual program. Merrill Lynch plans to have the service available in July.
Self-Directed Carries High Fee
For those wishing to pay by transaction rather than by year, Merrill Lynch plans to offer online equities trading in December for $29.95 per trade. While that fee is substantially higher than the fees other online trading services charge — such as E*Trade’s $15 per trade and Ameritrade’s $8 per trade — Merrill Lynch customers will also have access to no-load and load mutual funds, fixed-income services and cash management services. Merrill Lynch will also offer a cash management account to enable customers to conduct banking transactions online.
The site will also include a business-purchasing section, and the company said it plans to greatly expand its e-commerce services with its own “commerce network” of online Merrill Lynch clients. That network is designed to increase clients’ purchasing power and particularly assist independent business owners with online business transactions.
The “commerce network” will offer discounts for goods and services from dozens of e-commerce partners Merrill Lynch plans to attract. It will also include a link to Works.com, a popular purchasing hub for small businesses.