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Merrill Lynch's 'Merrill One' Platform Raises the Bar on Investment Solutions

Merrill Lynch is transforming its advisory business by doing what all other brokerages have only talked about for years.

In September 2013, Bank of America Merrill Lynch began the 12-month rollout of a $100 million project that would impact the workflows and relationship of nearly every financial advisor, client associate, and end-customer.

Internally referred to as Merrill Lynch One, the project merges its five siloed managed account platforms into one. Armed with a complete view of client's accounts, advisors can now more efficiently supervise assets and give more constructive advice.

The existing five legacy platforms are set to sunset at the end of 2015. These include Consults, Mutual Fund adviser (MFA), Personal adviser (MLPA), Personal Investment Advisory (PIA), and Unified Managed Account (UMA) platforms. Introduced between 1989 and 2007, variations in leadership, focus, budget, and technical limitations meant they were rarely a treat to engage with. With systems that did not talk to each other, advisors, and client associates struggled to on-board new clients. To construct any new changes required jumping through hoops of both management and IT complexities.

After years of half-hearted solutions, the managed solutions team concluded that ditching the existing way of things and delivering a completely new environment was the best move.

The curse of a giant
Merrill Lynch's plight is not unique. All major brokerage firms have multiple advisory platforms built and acquired at different times and stitched together. Or, sometimes, the systems aren't integrated at all. Merrill's commitment to overhauling the systems, to doing what all other brokerages have only talked about for years, is a bold and risky step. And perhaps that's what makes this mega project so fascinating: a large firm is finally taking the single managed account platform concept and implementing it throughout the organization.

"It was not the easy route they took there," says Alois Pirker, research director at Aite Group, who has closely followed the platform's development. "This is not lipstick on a pig. They knew it needed to be revamped and that's what's impressive here. They took a concept and really tried to take a fresh look at how e-business and investments are managed. They threw out acronyms and silo thinking and took a fresh look at how it should be done. That is really something that I haven't seen any firms doing."

The project has put emphasis on streamlined workflow, speed of contracts, and a unified fee structures. More importantly, it is removing the spaghetti of processes required to accomplish the most basic back-end tasks. The platform is now fully rolled out in six of their 11 markets, including the Midwest, New England, Mid Atlantic, NY Metro, Southwest, and Pacific Northwest. A seventh market deployment began May 19 in the Greater Midwest market, which will be completed in the next few weeks.

"Right now what we're seeing is exactly what we were hoping to see," says Lorna Sabbia, head of managed solutions for Merrill Lynch and lead on the project. More than 8,000 Merrill Lynch financial advisors now have access. To date, nearly 140,000 new and existing accounts representing more than $50 Billion in assets have been added to the platform.

"The technology is working as intended and our advisors are wanting to use it. To me that is an obvious measurement this it’s working. We're thrilled," Sabbia says.

This is not the first time Merrill Lynch has set out to address the complexity grown out of having of five siloed advisor platforms, but it is the first time it has worked to consolidate them into one.

Previous silo enhancements, including Portfilio+, a browser-based portfolio trading platform, was considered a great success for the Personal Investment Advisory platform. It was developed in a partnership with Charles River and went through 16 months of design work and pilots before being deployed mid-2012. For the sake of the bigger picture it too will be sunset with the PIA platform, although some of its functionality has influenced Merrill One.

"We made a commitment early on that this wasn't going to be a project," said Bill Bridy, head of Client Onboarding Services for Bank of America Merrill Lynch. "We said this is going to be an engineering of contracts, of the complete workflow. It is the engineering of the interaction and an integration into the much broader agenda of goals-based wealth management. We knew it was a big, aggressive and radical change, but the proof is in the pudding. We had a lot of financial advisors who adopted it in the pilot, which is unheard of."

"What we heard loud and clear from clients was that they’re looking for simplicity and transparency," adds Sabbia. "We heard that over and over again."

"There was a lot of frustration, although we were used to it..."
"Previous introductions had a lot of bumps," said Jennifer Barber, a former Merrill Lynch senior registered client associate based in Boston who now supervises CAs in her office. "For instance, enrollment process enhancements on previous platforms at times created as many challenges as they did efficiencies, whereas Merrill Lynch One provides a process for users far more streamlined and intuitive."

Client associates provide operational support to the financial advisors' business; among other roles their work includes transferring accounts, and preparing for client reviews, but they are interacting and experiencing efficiencies just as much as advisors.

By most accounts, frustration was the CA's standard emotion. "There were multiple choices with each platform, and with each choice were different sets of documents and set of knowledge required and different places to enroll the different accounts," explains Barber.

"It wasn't fluid. It was hard to keep track of the paperwork process because updated paperwork was not centrally located. It presented challenges for client associates who only had so much time to get task-orientated things done. There was a lot of frustration, although we were used to it before the Merrill Lynch One platform rolled out." Her client associate team was one of the first to pilot the new platform.

The new system is more user friendly and designed with constant feedback from users to make the workflow as intuitive as possible. A dashboard helps CAs jump between accounts, and a centralized control panel eliminates the steps of clicking through dozens of panels. "On the old platform, users could miss a lot of steps, on the new platform it won't let you progress until you've completed the important parts," adds Barber. "The ease of use is really where the time saver is. As a client associate it gives me a lot of time back in the day."

According to Barber, an experienced CA previously needed 10 minutes for each account enrollment, now it takes no more than 10 minutes per client regardless of the number of accounts.

Naturally, there was a healthy level of skepticism over how the client associates and financial advisors were expected keep a high level of productivity and learn a whole new system. To help ease the transition, Merrill Lynch deployed a team of experts to each location for a 22-week training cycle. Group training and one-on-one programs are constantly being tailored by user feedback.

[For more on Merrill One, read This is Why Merrill Lynch is Overhauling Their Platforms]

"In the training they show us a shortcut or say 'you can just do this' and a light goes off for a lot of people in the room. As soon as they do the first enrollment and see what the benefits will be they start letting go of the past," adds Barber. "The more people adopt, the more people are excited." Out of the 70 CAs in her offices, there is a 89% participation rate on the new platform, with more converting each week.

"Advisors are anxious to learn more," Sabbia said. "I don't know about you but in our experience most financial advisors are not begging us to be trained more, so this is something where they are excited to learn what this is about."

"We have clients literally hugging us for this."
The platform has been a boost for advisors. Many clients have more than one account and before One, advisors had to track assets on the five different platforms. Merrill One allows advisors to have a single view to match against client goals.

Each client will meet with their advisors to review their positions, discuss the new goals-based fee structure and sign the new contract. E-signature tools have been rolled out to speed along the process and to encourage online accounts and e-delivery.

Under the new goals-based structure pooling the disparate account balances could result in a more favorable fee. The higher the account value, the lower the fee. Eager to improve their rates, clients have been actively bringing over assets from competitor services and adding family members to their account. Parents, for example, are signing on their children's mortgages to get better rates. The household level view gives advisors opportunities to uncover hidden assets and sell targeted products. That directly relates to a lot of the metrics advisors and CAs are tracked on.

Chris and Victor Panos, a father and son advisor team based in Orlando, Fla., began using the platform in November 2013. From their point of view, it is a sea change in how their business is run. "We do a lot of family accounts," says Victor. "When we go out to clients we are able to explain to them that Merrill Lynch bought on a new program that values the depth and breadth of their relationship. Whatever they were doing before, mortgages, investments, IRAs and so on, we can now value that in total. We are able to bring out relationship-based pricing and it has been understood 100% by the clients."

Chris Panos says he has not had a single client negatively affected by the change. "Everything has come together beautifully for this program. When we go through this with clients, they almost can't sign it fast enough, and they look at it and ask, 'Is that all there is?' It's absolutely wonderful."

The client's enrollment process has also been drastically improved. Chris says the processes that once required multiple phone calls and long wait times now take minutes, or possibly seconds in practiced hands.

After four months, at least three quarters of the Panos books were converted to the Merrill One platform. The only reason it was not a full 100% is that they couldn't get to clients fast enough.

"The training was outstanding," adds Victor. "We had a hands on team come out and the information they provided before the platform launched was wonderful, so we had an understanding of the different systems before they came in. We didn't once ask for anything more."

"Some people worried it would be a beta product when it came out, but it wasn't. It's a finished product, and they have continued to incorporate suggestions on making it even better; ease of use, simplicity, depth of knowledge. They're taking an A product to an A-plus."

Long-term benefits
The commitment to the overhaul has directly impacted the workflow for all parties in Merrill, but the investment is far from a one-time cost saving move. It's a continued rollout to optimize and simplify processes and platform structure.

Merrill made the decision three years ago, set the direction, and went all in. Even skeptics will admit that takes some courage, especially in a time when a lot of firms were shutting down bigger projects.

"Generally, the bigger the firms are the more silos they have," explains Pirker. "I haven't seen a strategy like this at other firms - but the pressure is up with this roll out, and the pressure will only increase as we see those things that could potentially change, actually change. Efficient on-boarding, faster growth, relationship-level pricing, and so on. As the impact comes clear, it will be a real catalyst for change in the industry. Merrill Lynch is setting the pace with this platform. They are probably three to five years ahead of other firms."

"They did a tremendous job realizing where the market was headed and making decisions," he adds. "In hindsight, absolutely the right ones, but when they started, these were bold moves."

To get this far Sabbia says a 270 person team has been working on the Merrill One platform for two and a half years in earnest. "They are continuing to work on it. We're not done. We're just getting started."

Becca Lipman is Senior Editor for Wall Street & Technology. She writes in-depth news articles with a focus on big data and compliance in the capital markets. She regularly meets with information technology leaders and innovators and writes about cloud computing, datacenters, ... View Full Bio

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