Internal documents obtained by the Wall Street Journal indicate that customers of one of the nation’s largest brokerage firms may soon have to pay more for its services.
Account management fees at Bank of America‘s (BAC) Merrill Lynch unit could rise as much as 50% from existing levels. The higher fees are part of general restructuring of Merrill’s brokerage service, consolidating service platforms and fee schedules. Merrill Lynch has more than one million managed accounts.
Clients who have accounts in several brokerage platforms could see their overall fees decline, due to the consolidation. The bank will require advisers to adopt the higher account management fees by the end of 2015.
The fee hikes have rankled some account advisers at the Wall Street firm. Higher fees could increase customer defections and hobble advisers from offering key clients better terms to stick with the bank.
Accounts valued at up to $250,000 would face a minimum management fee of 1.6%. The fee falls to 1.4% for accounts from $250,000 to $500,000 and 1.3% for accounts between $500,000 and $1 million. Accounts between $1 million and $2 million will see a 1% minimum fee.
Merrill Lynch customers will have the option of switching to the banks new platform and can negotiate fee changes to some extent, a Bank of American representative told the Journal.
Shares of Bank of America climbed 2% in Thursday midday trading.