Digital onboarding, advisor-client matching: Merrill upgrades tech

The past three years at Bank of America's Merrill Lynch have been studded with five significant innovations.

The new technologies are meant to help customers onboard more seamlessly, plot their financial strategies and pinpoint suitable advisors, as well as make it easier for advisors to locate client information on the go and boost their web presence with informative videos. The focus on digital is part of what Bank of America calls its "modern Merrill" strategy, which centers around delivering a positive digital wealth experience, boosting productivity for advisors and driving client acquisition. 

Business has also been booming at Bank of America's wealth management arm. Merrill Lynch added 25,000 net new household relationships in 2022, including 8,500 in the fourth quarter. This marks an increase of 27% year-over-year and was the strongest quarter for net new relationships since the second quarter of 2019. The rate of net new households joining Merrill in the first five weeks of 2023 was also double that of the same period last year.

"We are winning clients at a pace we've never seen before," said Andy Sieg, president of Merrill Wealth Management. "I wouldn't attribute that solely to technology, but it's a key aspect of what we think is making the modern Merrill strategy stand out in the market."

Digital features are a key part of acquiring customers — especially as wealth shifts to younger generations — and retaining advisors by making processes more efficient.

"Merrill has been the historic leader" in wealth management in the U.S., said Nilesh Vaidya, global industry head of retail banking and wealth management at technology consulting firm Capgemini. "They had a sizable lead in the past but there have been many other innovations that are competing with them effectively." For example, Vaidya cites that Citi has been focusing intensely on customer-centric innovation as it brings its wealth management and private banking business together. 

Merrill's competitors include wire houses such as Morgan Stanley, UBS and Wells Fargo Advisors. There has been increased competition from other fronts as well. 

"Registered investment advisors stand to get really big," said Alois Pirker, founder and CEO of wealth management consultancy Pirker Partners, as lines blur between RIAs and broker-dealers. The emergence of wealth management platforms such as Dynasty Financial Partners is also evening the playing field for firms without large technology teams.

"The one thing Merrill has done so well is keeping a consistent innovation drive over the years," said Pirker.

Banks go all in on wealth management, but can they all succeed?

The company's Collaborative Onboarding Experience, or COBE, is one example. It launched in the spring of 2020 as a fully digital opening and onboarding process.

"Before 2020 the first impression of a relationship with a Merrill advisor was them walking through the door with a stack of papers," said Casey Franz, head of Merrill platforms and capabilities.

Advisors can now walk clients through the digital onboarding process in person on a tablet or virtually, via real-time collaboration onscreen, covering such items as gathering information about their investment history to entering their addresses. The advisor won't have to re-key information in other systems once the digital onboarding is complete. The next step for Merrill is to improve automation to the point where an advisor does not have to manually approve an account.

Merrill Lynch reports that 60% of eligible accounts are now opened digitally, which has more than doubled engagement in the past year. Onboarding through COBE can happen almost instantaneously, versus the days it could take with a paper-based system.

"Digital onboarding at other firms is often a vendor solution added onto the stack," said Pirker. "COBE is differentiating itself with tight integration into the whole Merrill setup." This lets Merrill collect and share data about customer preferences that could inform other aspects of the client experience.

Pirker feels similarly about Personal Wealth Analysis, or PWA, a digital financial planning tool that Merrill launched in the middle of 2020.

"Many firms have vendor solutions in place there, but typically not integrated into the advisor workflow," said Pirker. "Merrill's solution [is integrated] into the data architecture and is less of a silo."

PWA is a digital tool that produces a document advisors and clients can scroll through together in person or virtually that covers client goals, investment plans and new events that may affect those plans as they pop up, such as having another child or moving in an elderly parent with medical needs.

"It's also going to be an anchor that you are checking back to periodically," said Franz.

A Financial Planning article about PWA when it debuted noted that Morgan Stanley's Goals Planning System plays an integral role in WealthDesk, its advisor tech platform, and Wells Fargo Advisors has proprietary software called Envision for planning.

The next launch was Mobile Advisor Experience, or MAX, in August 2021. It's an app that consolidates client information that normally lives on the advisors' computers or workstations, so they can easily access client balances or personal information when they are on the go.

MAX has received the most enthusiastic response from advisors, said Franz, because it helps them maximize time with their clients. Nearly 90% of advisors are using MAX.

Clients often find their advisors through referrals, but Merrill Advisor Match, launched in October of 2022, is meant to be a "warm experience" in contrast to a cold lead, said Franz. Customers answer questions on the Merrill website about their location, investing approach, financial needs, preferred ways to meet with their advisors, communication style and even personality ("are you more of a planner or more spontaneous?"). Merrill built an algorithm that matches clients with advisors, who have also entered their preferences. When users finish the quiz, they see profiles of at least five advisors that fit their criteria.

So far, more than 7,000 Merrill advisors have voluntarily enrolled, which covers about half of Merrill advisors who could use Match.

There are good strategic reasons to connect clients and advisors through the Merrill website, said Vaidya. If clients find advisors through referrals, they may feel a stronger relationship with their advisors than Merrill as a firm, and potentially follow their advisors if they leave the company. With Match, "The relationship is owned by Merrill and the advisor becomes a service provider," said Vaidya.

"I would expect every wire house to come up with a version of this," Akshay Singh, a former Merrill Lynch advisor and the founder of Indyfin, which offers a matching platform for clients to find independent advisors, said in an interview with Financial Planning. He noted that Edward Jones, a large brokerage firm, had already launched a similar product, its Edward Jones Match quiz. The article noted that efforts in this area by Morgan Stanley, Wells Fargo and UBS were more bare bones.

The most recent launch is Merrill Video Pro, which debuted in February. The program lets advisors choose from a library of scripts about topics such as inflation or market volatility, adapt as necessary to suit their own voices, record a short video using the program's teleprompter, submit it for review and approval and publish the finished product to a website or LinkedIn. Franz has also seen advisors in the pilot play a video before a seminar they are hosting.

Bank of America's private bank has been adopting some, but not all, of Merrill's technology as the larger business gives them a first run. For example, the private bank is currently piloting COBE with a subset of trust accounts before expanding it to the full suite of trust solutions.

"We found early on when we looked at COBE that we wanted to roll it out in Merrill first because of the scale. We would learn a lot by looking at the onboarding of banking and investment products," said Katy Knox, president of Bank of America's private bank.

Sieg observes that in his 30 years in the business, the most challenging aspect of introducing new technology in wealth management is the pace at which advisors adopt it.

"Not surprisingly, we all get used to working a certain way and clients get used to a certain way of interacting with our firm," he said. "Having a new piece of technology is exciting but it doesn't have a lot of impact on the business until it is adopted by advisors and clients.

"One thing we've gotten much better at as a firm — and I think the technology itself is helping because it's even more compelling — is speeding up the adoption," he continued. "When something is really good, it'll spread by word of mouth."