BofA Welds Name onto Merrill Units, Dissolves U.S. Trust Brand
(Updates to indicate that the former U.S. Trust will continue to report results as part of Bank of America’s Global Wealth and Investment Management division, which includes Merrill.)
Bank of America said Monday it will lay to rest the 165-year-old U.S. Trust name for its traditional private banking business and keep the Merrill name as a “sub-brand” for its four retail investing and wealth management offerings.
The change will include new signage, advertisements and business cards that declare Merrill “a Bank of America company,” but preserve the 105-year-old brand for its four principal brokerage businesses, according to an internal announcement being sent to BofA employees on Monday.
U.S. Trust, which Bank of America bought from Charles Schwab & Co. in 2007, will be renamed Bank of America Private Bank, the company said.
While the rebranding is meant to clarify business segments and reposition the banking giant from what one person said was a company of brands to a branded company, the trust unit will bear a nomenclature resemblance to Merrill Lynch’s Private Banking and Investment Group, its high-net-worth cousin that will now be called Merrill Private Wealth Management.
“The differences in our ultra-high-net-worth offerings are derived primarily from the history of each,” Merrill Lynch Wealth Management President Andy Sieg said in a prepared statement. “While the Private Banking & Investment Group started with a focus on investments and capital markets, U.S. Trust had its roots in trusts, estate planning and credit.”
The Merrill PBIG unit includes around 350 advisors working with clients with $3 million or more in assets. U.S. Trust’s 1,747 sales professionals cater to the same wealth cohort, with more traditional private banking services that range from coordinating with estate lawyers to the proverbial “dog-walking” services offered to the very wealthy.
Some of Merrill’s more than 14,500 wealth management brokers, along with outside consultants, have forecast that Bank of America will ultimately change the grid-based payout structure for all of its brokers to the more predictable, less remunerative salary-plus-bonus U.S. Trust structure, but sources said there are no immediate plans to do that. Merrill brokers keep 34% to 49% of the fees and commissions they generate from clients, with the percentage rising as production increases.
Under the rebranding, the brokerage/investment businesses will be marketed as Merrill Edge Self-Directed (the bank-housed discount broker), Merrill Guided Investing (its robo), Merrill Lynch Wealth Management (for $250,000-plus client accounts) and the renamed $3-million-and-up Merrill Private Wealth Management.
To further clarify its customer segments, BofA will no longer designate its institutional broker-dealer businesses with the Merrill name. The investment banking, global markets and capital markets units that had been branded as Bank of America Merrill Lynch will now be marketed as BofA Securities.
The rebranding does not signal personnel changes and will not affect the bank company’s regulatory reporting functions, said a person familiar with the plan. The Merrill Edge Self-Directed business, for example, will continue to be structurally housed within the company’s consumer bank while the private banking and other wealth management businesses will separately report as the global wealth and investment management division.
The bank considered merging U.S. Trust and PBIG, but backed off in part because of legal complexities and because of market research that confirmed the power of the Merrill name, the person said.
Merrill was founded in January 1914 as Charles E. Merrill & Co. and changed in 1915 to Merrill, Lynch & Co. The Lynch name will remain as part of the broad Thundering Herd business and as the legal moniker for the firm’s broker-dealer, Merrill Lynch Pierce Fenner and Smith.
Bank of America bought Merrill in January 2009 in the depths of the financial crisis.
“Our new name builds on the strengths of Bank of America and we will be leveraging our tremendous resources in world-class technology, innovation and the best client experience,” Katy Knox, president of Bank of America Private Bank, said in a prepared statement.
BofA said that it will support the rebranding with a “multiyear advertising campaign” that is likely to begin in April for the Merrill businesses.
A bank spokesman declined to discuss the cost of the rebranding and advertising campaigns, but noted BofA Chairman and CEO Brian Moynihan’s publicly stated intention to hold noninterest expenses throughout the company flat at around $53 billion in 2019.
Bank of America coordinated the rebranding through Lippincott, the brand consulting firm, and is using Hill Holliday as its ad agency.
In November, the bank unveiled a new logo and and ad campaign that featured its CEO in a 60-second TV spot promoting its civic giving and saying: “I am Brian Moynihan, and I work for Bank of America.”
Moynihan received a 15% pay hike to $26.5 million to reward his stewardship as the bank reached record 2018 earnings.
Sieg, who along with U.S. Trust’s Knox joined the bank company’s management committee in December, received 150,000 shares of restricted stock earlier this month to supplement his 2018 compensation that has not been publicly reported. The stock grant represents a 69% jump from the shares he was awarded the previous year.