Professional Documents
Culture Documents
Trading
Underwriting
Strategic Services
Delegate Investors
Older mostly male investors who are not too involved in their personal finances, prefer to Delegate it to professional advisors Often have relationship with full service firms and mutual fund companies
Customer Profiling
Affluent individuals with investable assets of at least US$100,000 Priority Clients with at least US$250,000 Premier Priority Clients were generally higher level of affluence with greater than US$1 million in assets with greater use of products across the categories with at least US$100K in each assets, liabilities and transition Premier Plus were wealthy individuals who require specialized financial products and services. Household Existing Private Clients Potential U.S. Market
25 150
825 2500 2000
266 8864
10495 94577 27000
Q1. Justify Merrill Lynchs speed in responding to market changes, was it slow?
Events
Inception of the Company Great Depression Recovery from the Great Depression Introduction of CMA The Financial Service Industry began deregulation Launched Integrated choice model
Year
1914 Late 1929 Late 1940s 1977 Through 1980s & 1990 1999
In spite of the rise of internet and enabling technologies Merrill Lynch preferred to wait and watch till the technology is stable, safe and well accepted by the investors; to the extent that it drives the business. After analyzing that the Technology and Price are driving the market, they adopted a methodical way to counter the situation in order to maintain their lead position.
Cont
Until late 1990s Merrill Lynch was competing against Full service brokers such as Prudential Securities, Morgan Stanley Dean Witter banks The internet revolution gained momentum around late 1980s Early technology adopters like Charles Schwab grew and the clients became more affluent by leveraging: The product portfolio designed to benefit the investor Embracing the internet the services were convenient and competitive Hence the competition was three dimensional for Merrill Lynch Merrill Lynch charted out a methodical approach for Business Strategy Transformation
Based on the need clients could opt for a single or multiple accounts
ML Direct Direct Investor Services Client Financial Consultant Traditional Fee Based Relationship Fee Based Discretion
The implications of Integrated choice -for clients, for financial consultants and for the Firm
Engaging Clients
Educating them about the new model Engaging Establish a communication emphasizing in the desire to choose philosophy
Convincing them that the online world would stay Manage their commissions against the Negative impact of the new model Technical challenge- reacting and managing the surges associated with online volumes Failure to deliver would be risky Competitors to catch up before implementation of the model Retaining the talent and reinforcing their trust in the firm
Transformation
Phase I: Building the New Merrill Lynch To create understanding, awareness & excitement towards the new business model
Revamp the National Web Site as the prime source of information to Financial Advisors about the key initiatives
Phase II From Wall Street to Main Street to My Street Educating employees through the intranet WorldNet
The channel contained information about new business model, incorporated programs, & provided a vehicle for two way communication
Phase III Ongoing Communications Ongoing educational efforts providing information on new events related to the new business model
In conjunction with all these Town Hall, Walk Around, Business meetings and interactions with Senior management to create the excitement & commitment towards the new business model