Merrill Lynch pivots to mildly affluent clients

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[June 09, 2015]  By Jed Horowitz

NEW YORK (Reuters) - Merrill Lynch brokers plan to pay renewed attention to people with $250,000 to $1 million to invest, a wealth cohort that many big brokerage firms have been ignoring as they pursue clients with multimillions, John Thiel, head of Merrill Lynch Wealth Management, said on Monday.

"The whole industry is struggling" to serve the almost-forgotten segment that Wall Street labels "affluent," Thiel said at the Reuters Wealth Management Summit. "They're not getting enough time and attention."

Merrill, a Bank of America Corp firm with more than 14,000 brokers, and competitors such as UBS Wealth Management Americas  and Morgan Stanley have been urging brokers to focus on so-called high-net-worth investors with more than $1 million to invest or ultra-high-worth clients with at least $10 million to $25 million.

But the affluent in the United States represent a $10 trillion market "so we're not giving up on that," Thiel said at the summit held at Reuters' New York headquarters.

He declined to elaborate on what Merrill is considering, other than to say that the rapid growth of so-called robo-advisers with low-priced computer-generated investments are creating innovations for affluent investors.

More than 30 such investment platforms, from start-ups to new ventures from Charles Schwab Corp and The Vanguard Group have been started in the past four years.

Their ability to automatically rebalance client portfolios so that they meet investors' risk appetites and goals have likely attracted the affluent "because there was a need," Thiel said. He said Merrill brokers will be able to give more hands-on advice because of automated procedures such as rebalancing.

"We're going to make sure our resources are matched against the opportunity," Thiel said.

Merrill does not pay its advisers to service clients with less than $250,000, whom they refer to Bank of America's no-frills Merrill Edge platform.

(Reporting By Jed Horowitz and Ross J. Kerber)

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