Bank of America CEO Brian Moynihan predicted third quarter revenues at Merrill Lynch and Bank of America Private Bank “should be strong” as client asset levels, which are measured at the beginning of each quarter and form the basis for the wealth unit’s fee income for the quarter, rose solidly between April 1 and July 1 as the markets recovered.
This bodes well for other wealth managers, as many posted lower customer asset levels in the second quarter and thus struggled on the revenue front relative to prior quarters.
Bank of America/Merrill is expected to report third quarter earnings on Oct. 14.
In addition, Moynihan, speaking at the Barclays Global Financial Services Conference on Tuesday, singled out that a larger portion of Merrill’s clients have been using the company’s Merrill app, which he noted enhances the client experience, enables the firm to “deliver at lower cost structures” and encourages the client to “change their behavior at a faster pace,” which not only contributes to the digital experience but also continues to enhance cost savings.
According to a Bank of America spokesman, in the past 10 weeks, the firm has seen an 11% increase in the app, which offers features such as mobile check deposits and mobile form signing. He said that as Merrill clients “continue to embrace core digital capabilities and discover these features, we find overall client relationships becoming deeper and stickier.”
“Paperless is moving to an all-time high,” added Moynihan. “It picked up its pace again just because it was easier for people with our new application where they can see more transaction level detail in all their accounts through one app, which saves them time, speeds up usage,” he said. “On the wealth management side [we want to] drive the next round of effectiveness in the enterprise, which is both customer sales percentages and cost takeout. And it’s been fantastic.”