Merrill will sell asset managers a map of its advisors' books

Merrill Lynch will begin selling asset managers a view of individual advisors' practices on January 1, charging $125,000 to $860,000 a year for the main package and $25,000 to $550,000 for a separate feed covering passively managed exchange-traded funds, according to an updated disclosure brochure filed Friday. A Merrill spokesperson confirmed that the program is new and that the fee schedule applies uniformly to every fund manager with products on the platform.

The brochure describes the offering as product usage, sales metrics and other "analytical data" that fund managers can use to "tailor sales and educational efforts." The last phrase is the part that does the work. A wholesaler whose employer buys the feed reaches a Merrill advisor already knowing which funds sit in the book, where flows have moved and which shelf space is taken — the difference between a cold call and a renewal conversation.

Merrill also states that the data does not include account-level or individually identifiable client information. Taken at face value, that moves the exposure somewhere advisors may find less comfortable: client identity is not for sale, but the practice's own product signature is, a business fact about the advisor, assembled by the platform and priced to third parties without the advisor's hand in it.

Rivals have sold versions of this for more than a decade, so Merrill arrives at the back of that line, but its prior practice was narrower: the firm gave fund companies data only on advisors who already used their products, a feed that rewarded the incumbent and told a competitor little. The new program sells across the platform and covers mutual funds, ETFs, alternative investments, separately managed accounts, model portfolios, annuities and insurance.

The published comparables explain the price, with Morgan Stanley charging $25,000 for a basic mutual fund package and as much as $500,000 for more comprehensive information, plus additional fees for data on ETFs, unit investment trusts and separately managed accounts. Wells Fargo Advisors discloses a ceiling of $1.15 million for aggregated sales data, the highest of the four figures, while UBS, whose advisor force is less than half the size of its wirehouse peers, collects between $150,000 and $300,000; Merrill's $860,000 top band trails only Wells Fargo's.

Every buyer pays the same posted rate, which makes the data behave like a commodity: no manager gets an exclusive view, and the advantage goes to whichever distribution desk acts on identical information fastest. That reading is an inference from the schedule, not a statement by the firm, but it explains why Merrill can present the program as a platform feature rather than a favor to any one manager.

The filing concedes the tension the program creates: Merrill acknowledged in the brochure that the payments give it a financial incentive to make available and recommend products from third-party firms that pay for analytics over those that do not, and a further incentive to favor buyers of higher-priced packages over buyers of cheaper ones. Advisors will receive none of the payments, the brochure states, and the money does not directly factor into the chief investment office's product review.

A second charge takes effect the same day: a "support fee" of up to 0.10% a year on asset managers that expands on existing revenue-sharing agreements.

For advisors, the consequential part of the filing is the product list, and alternative investments are among the covered categories. Alternatives are moving from institutional menus into advisor models, where the wrapper, rather than the manager, is the diligence that decides outcomes; a data sale adds a targeting layer to that migration. A manager drafting next year's territory plan can buy a view of which Merrill practices already carry an alternatives position — the list a distribution desk wants and the conversation an advisor would rather run on their own terms.

The timing lands in an active stretch for the firm: PWD's tracking shows four team-liftout entries tied to Merrill since September 11, three carrying $1.2 billion books, and the September 16 report on Merrill recruiting while Morgan Stanley made a capacity pitch described two wirehouses selling opposite hiring strategies in the same week. A program that turns the practice itself into a billable dataset is one more term for a team weighing a move to price.

What changes at the branch is the quality of the interruption. An educational meeting that arrives loaded with the manager's view of an advisor's current holdings is a product conversation with a running start, and an advisor who wants the comparison set will have to ask for it by name. The brochure describes no way for an advisor to step out of the dataset.

None of this amounts to a client-data emergency, and advisors who treat it as one will spend their energy in the wrong argument. The useful response is to treat the practice's product mix as an asset with a market price attached — the firm set one, at $125,000 to $860,000 a year — and to know what that mix reads like to a distribution desk that can now buy it. The advisors with leverage in that exchange are the ones whose shelf is distinctive enough to be worth the fee.

Merrill's price band is the tell: an entry point of $125,000 a year and a ceiling below Wells Fargo's disclosed $1.15 million suggest a firm pricing for the whole market, and a uniform schedule makes the data a line item any manager on the platform can budget. The next recruiting conversation at Merrill will have a new number in it — what an asset manager pays each year to look inside the book the advisor built.