NEW YORK, Oct 13 (Reuters) - Bank of America Corp has been quickly expanding its reach to those who are not wealthy enough to be customers of financial advisors within its Merrill Lynch brokerage, but have enough money to open an investment account.
In reporting third-quarter results on Friday, the second-largest U.S. bank said it now has 2.3 million accounts representing $167 billion in assets in its Merrill Edge business, which caters to investors with less than $250,000 to invest.
Assets are up 21 percent from a year ago, the second quarter in a row with that level of growth. The average customer now has nearly $73,000 in investment assets.
After acquiring Merrill Lynch at the height of the 2007-2009 financial crisis, Bank of America discovered that some portion of the investors it catered to were not profitable enough to devote a full-time financial adviser to them. The bank also had a significant number of retail customers who met the same profile: they had enough money to be comfortable, but not enough to comfortably buy a Lamborghini.
So, in June 2010, Bank of America launched Merrill Edge with just $45 billion in assets.
Growth was initially driven by legacy Merrill Lynch advisers handing over less-wealthy clients and inactive accounts to a team of call center and bank-branch brokers. But now, it is driven by a growing pool of home-grown advisers and customers who find out about Merrill Edge through Bank of Americas web site or app, Merrill Edge President Aaron Levine said in an interview.
"We've had a very clear strategy to support Bank of America clients who maybe never had an investment account," he said. "We've seen a consistent climb in our organic growth."
Customers who open a basic Merrill Edge account can do so with just $1, but need at least $5,000 in assets to open a more sophisticated Merrill Edge Guided Investing account that helps guide them on investment decisions using algorithms. To get a human Merrill Lynch adviser, customers need to have at least $250,000 in wealth.
Edge started with just 200 advisers at its launch, but now has 2,150 inside physical branches and another 1,000 based at call centers, he said.
(Reporting By Elizabeth Dilts; Editing by Lauren Tara LaCapra and Diane Craft)