Is Your Trusted Advisor Giving You A “Fair Deal”

There’s increasing evidence in the financial advisory market that so-called “trusted” financial advisors are shedding clients they don’t deem financially beneficial, and shipping these clients – millions of them, potentially – to “cattle call centers.”

You can’t blame disenfranchised investors for being ticked off. After all, nobody hires a financial advisor to be dumped over his or her amount of financial assets.

By and large, the message Merrill is sending to Main Street investors is that, despite what we promised you when we landed your business, your assets don’t rise to the amount we need, and therefore it’s best to reduce the quality of services we promised you.

Oh, and we’ll keep taking a fee from you, even though we’re giving you to someone you don’t know. So yes, since you asked, we’re going to charge you the same, but give you less business.


Merrill Turns Its Nose Up On Under-$250,000 Clients

The Merrill move signifies a deeper trend among major investment houses to get more from their advisors, while giving less to their lower-asset clients.

These firms are actively pushing their advisors to shed smaller client accounts, despite the fact that those companies, and those advisors, took customers on with promises to stick with them financially, and to be there for them when clients needed help.

Take the Merrill Lynch Wealth Management’s plan cited above. In 2015, the firm will adjust advisor pay to push them toward higher-asset accounts, where compensation percentages will be significantly higher.

According to Bloomberg News, the new Merrill Lynch initiative will slash payouts on so-called “small household accounts” - clients with $100,000 to $250,000 in assets.

This from Bloomberg:

“Advisers with affluent clients--or those with more than $250,000 in assets--consisting of 80% or more of their book will receive a 20% payout on smaller accounts. But those that don’t meet that book threshold won’t receive any compensation for so-called mass affluent clients. Previously, Merrill didn’t distinguish client sizes among existing accounts when calculating an adviser’s payout.”

Or investors with lower assets who don’t make the cut, the penalty is borderline humiliating – banishment to Merrill Edge’s online and telephone-based call center, the Siberian desert for “lower asset class” investors.

Incredibly, Merrill is spinning the move as a benefit to lower-asset clients, who will now finally get the attention they deserve.

Oh boy, will they.

“We’re really encouraging [advisers] because of a lack of capacity in their book,” said John Hogarty, chief operating officer of Global Wealth & Investment Management at Bank of America. “They have a tendency to spend time with their more meaningful clients and the clients below $250,000 aren’t getting the right level of service according to their needs.”

Banishing smaller investors to call centers is not what Merrill promised clients when they signed them on to their books. It’s insulting to the client, who is saddled with the same fees but sees his or her service quality reduced.

That’s not what the client was promised – not by a long shot. But expect to see more, rather than less, of the new client service model from more firms, who seem to be focusing more on the advisor and less on the client on an increasing basis.

To fight back, visit , where you can find out exactly what you’re paying your advisor in fees, and also get a good grip on the services you’re getting for those fees. At GuardVest, measuring financial advisory importance performance and tracking client expenses is what we’re all about.We keep investors informed so they can hold advisors like Merrill Lynch accountable, by bringing speed and simplicity to the process of becoming an informed investor.

After all, there’s no law that says you have to be a stranger to your own financial advisory company, and pay the same fat fees – no matter what Merrill Lynch says.