Merrill moving to portfolio-based system

Merrill Lynch & Co. Inc. is verging on a strategic move that would potentially eliminate its managed accounts platform in favor of a model portfolio-based system, according to a FundFire report.
The New York-based wirehouse, which has the second-largest SMA program with $157 billion, according to Cerulli Associates Inc. of Boston, will introduce the new system as early as March, according to sources quoted by FundFire
If Merrill pursues the change aggressively for its Consults program, it could have profound implications for the advice industry, according to Stephen Winks, consultant with SrConsultant.com in Richmond, Va.
“This brings real-time advice from the manager” rather than a pre-packaged portfolio, he said. “Though the brokers don’t know it, Smith Barney [of New York] already has [portfolios packaged] at the company level [rather than by the managers themselves]. If Merrill Lynch [has client portfolios packaged] at the adviser level, that’s extremely progressive because the adviser become the value-added rather than the manager.”
Indeed, under the new Consults program, an equity SMA manager would get paid .28% of assets rather than .42% and a bond manager would see a reduction in pay from .36% of assets to .22% of assets, according to the article.
Merrill Lynch did not immediately return a call for comment.