SHORT INTERESTS: Merrill pushing brokers to think big

Merrill Lynch & Co. Inc. is pushing its brokers to dump small accounts.

The nation’s biggest brokerage is discussing whether its reps should take an ax to small, transaction-based accounts, say Merrill brokers and sources familiar with the changes. If a broker has a transaction-based account of less than $100,000, they will either not get paid for the account or see a sharp reduction in the payout.

The potential moves would have two effects, observers say. Brokers would be encouraged to chase clients with more money to invest. They could also steer more client assets to Merrill’s online investing platform, Merrill Lynch Direct. Brokers’ business would also become increasingly fee based.

The changes were discussed in a teleconference at the end of September, one broker says.

A spokesman for the firm would not comment on compensation to its more than 15,000 brokers.

Putnam Lovell buys into e-wrap firm

A leading West Coast investment bank is taking a stake in a firm that uses the Internet to sell separately managed accounts to independent financial planners and advisers.

Putnam Lovell Securities Inc. has invested $12 million in AssetMark Investment Services Inc. through its private-equity arm. Putnam Lovell is getting a minority stake in AssetMark, which is based in Pleasant Hill, Calif.

The limited partnership is the latest formed by Putnam Lovell Capital Partners, based in Palos Verdes, Calif.

The deal, expected to be announced today, has the backing of some heavy hitters. GE Financial Assurance, PPM America Inc., Axa SA, Aegon USA Inc. and Caisse de Depot et Placement du Quebec are investing in the partnership.

AssetMark has about 1,000 advisers as clients, with $1.6 billion in assets under management.

Ambitions macro, grades micro

If Al Gore and George W. Bush were in college, their economic plans would do little to impress their professors. The Economist magazine recently asked 91 academic economists who specialize in public policy to grade the presidential candidates’ economic plans as if they were student term papers. Fifty-four responded to questions about the candidates’ fiscal policy, ways to use the projected budget surplus and Social Security reform plans.

The vice president scraped by with a B-minus average, and the Texas governor managed a straight C. Each candidate received an A from fewer than 10% of the economists.

While Mr. Gore scored an A or B from 76% of the economists when it came to the fairness of his plan – with 50% giving Mr. Bush a D or F – they were suspicious of many of the vice president’s campaign claims.

Investors can take stake in a state

Anyone thinking about buying stock in the 100 or so public companies based in Maryland can do it for free until Oct. 24.

Baltimore brokerage Peremel & Co. Inc. last week launched what it’s calling “Take Stock in Maryland.” It lets investors make free trades in all public companies based in the state – and those with significant operations there, such as First Union Corp. and Procter & Gamble Co.

Among the better-known Maryland stocks are spice maker McCormick & Co. Inc., hotelier Marriott International Inc., fund shop T. Rowe Price Associates Inc. and toolmaker Black & Decker Corp.

The catch: Investors will have a brokerage account with Peremel, which charges $18 for online trades and $38 for traditional services.