By Bill Broich
A recent press release from Merrill Lynch announced record revenue based on fee growth. I read with amazement why Merrill Lynch would even want this information known. After all fees on their clients’ accounts means expenses were being paid by them, the customers. According to the press release Merrill Lynch’s asset management fees of $1.5 billion were up almost 17% from the prior year. Client balances — which include loan balances and deposits at Bank of America —crossed the $2 trillion mark. More advisers, approximately 46%, were serving a majority of their clients in a fee-based relationship, the firm said.
Hard to imagine $2 trillion anywhere let alone invested with a firm that sends out press releases announcing how much money they have made on fees.
The question that comes to my mind is why? Why do so many people invest with a firm that charges these fees? Is Merrill Lynch better than any other broker, do they have an insight the rest of us don’t?
My guess is it is marketing, a finely tuned marketing effort targeted to their client base offering services and services and services and of course fees are added. If you would like to see the full article and find out how much money Merrill Lynch has attracted, here is the link:
By the way, if you are curious about mutual fund fees, the industry discloses these fees to any consumer wishing the information: www.finra.org
However you decide to invest, make sure you fully understand the fees associated with your chosen broker, it could be worth your time to avoid the broker’s lattes and visit Dunkin Donuts first. Saving a fee here and there can make a lot of difference over a period of time.