Merrill Streamlines Their Platform To Deliver UMH for Clients

Last week, I was contacted by a reporter from FundFire looking for my comments on a new feature that Merrill Lynch has implemented as part of their $100 million platform consolidation project.  The project, called Merrill One, is replacing five other legacy programs, some of which have been running for over 25 years.  She was interested in my opinion as to whether the rest of the industry is also moving in this direction and what progress they have made so far. FundFire logo

The new platform is designed to deliver a streamlined experience to Merrill’s 1.4 million clients in managed account programs.  It includes a single set of documents, no matter how many different types of accounts or products the client has as well as a unified fee structure.  If all of this is delivered, it will keep Merrill on the cutting edge of investment advisory technology.

Merrill plans to sunset their five legacy platforms by the end of 2015.  These include Consults, Mutual Fund adviser (MFA), Personal adviser (MLPA), Personal Investment Advisory (PIA), and Unified Managed Account (UMA) platforms.  Launched between 1989 and 2007, these systems did not talk to each other, with advisors and client associates required to jump through hoops to implement even the simplest of changes.Merrill logo

The One project was started in September 2013, after Merrill’s wirehouse competitors had already finished rolling out their own new platforms and integrating large acquisitions.   It remains to be seen how Merrill deals with technical glitches and possible negative feedback from advisors.  How well will the new system move towards providing advisors with a central, unified view of their clients?

To quote the article:

This new householding technology brings the platform closer to the unified managed household (UMH)-type model that industry professionals have deemed the next step in the evolution of advisory platforms.

“Many clients think about their goals as joint goals and would like to combine accounts from multiple individuals into a single client account,” says Lorna Sabbia, head of the managed solutions group at Merrill Lynch. “At the end of the day we’ve done a lot to streamline the things you can do in a single account.”

Sabbia had previously referred to the convoluted process that Merrill advisors had to go through to combine statements, performance reports and other materials for clients from multiple programs as, “sausage-making”.  This new feature should streamline a large portion of that formerly very manual procedure.

But what exactly does it mean to offer a UMH-type model?  And is this the direction the industry is actually going?  The article, written by Danielle Verbrigghe, has something to say about that:

… the industry is headed toward more household level integration throughout advisory platforms … says Craig Iskowitz, a principal with Ezra Group. “A UMH is definitely more than combining accounts,” he says. “[But] most brokerages aren’t there yet.”

Integrating technology across front- and back-end processes to implement household level wealth management is a significant undertaking, he says. “It’s difficult to do if you don’t have all parts of your system aligned.”

This article was focused on the portfolio management and goals-based functionality, so Danielle didn’t include my other comments.  I explained that a true UMH platform carries the household paradigm from end to end.  If you only have household support in portfolio management, but not in proposals or performance reporting, it is not a real UMH solution. (See FolioDynamix v7.1 Delivers UMH Support)

For Merrill, constructing a goals-based wealth management platform, rather than a UMH, is the ultimate goal, Sabbia says.

“We’re not going about our work saying ’what does a UMH construct look like?’” Sabbia says. The focus is really on how best to deliver goals-based advice, she says. “We are going to continue to have that be our guiding principle.”

I believe that UMH functionality is critical for goals-based advice.  Very few clients are single with no children or other close family members they want to take care of.  Their goals include these people, but if you can’t view all of their accounts in aggregate across all aspects of your system, then you are forcing advisors to do a lot of extra work, which was the main reason for the platform consolidation in the first place.  (See Unified Managed Households: The Holy Grail of Wealth Management?

Merrill is serious about the benefits of platform consolidation.  They are even shutting down their Rep as PM platform (PIA) that was built on Charles River Development’s technology and only deployed in mid-2012.   That decision had to ruffle some feathers, especially in their IT groups, which went through a difficult time dealing numerous delays from Charles River on delivery of customized platform functionality.


Rationalizing their disparate pricing structure was also a key deliverable of the One project.  According to a Merill advisor quoted in Investment News:

Whatever they were doing before, mortgages, investments, IRAs and so on, we can now value that in total. We are able to bring out relationship-based pricing and it has been understood 100% by the clients.”

There was concern that some advisors would experience a drop in revenue when switching to the new platform.  Also, the higher, unified fee schedule might not be understood by clients who were used to multiple programs with smaller, separate fees.  But the unified fee schedule will also bring more discounts since client assets will be lumped together.

“The No. 1 thing I’ve heard from advisers is, they want to treat a client as a client regarding pricing,” said Sabbia. “So a client might have $10 million in a brokerage account, but a $500,000 Consults [separately managed account] is opened as a $500,000 account” and priced accordingly.

View the full article below on FundFire’s website: Merrill Marches toward UMH with New ‘One’ Platform Update

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10 Responses

  1. Aaron, thanks for the kudos. I was surprised by Merrill’s move as well. They also seem to be trying to minimize any negative publicity for Charles River Development since it is their technology that is being eliminated. This is especially insightful considering Merrill spent over $30 million on development of Rep as PM with CRD. There has to be some serious issues to drop them after only two or three years.

    I am hearing that many firms are looking to consolidate their platforms in order to run all of their fee and commissions based programs off the same chassis. FolioDynamix is one of a number of vendors that are well-positioned to take advantage of this fortuitous trend.

    Best of luck!

  2. Great article, Craig. I’m surprised to see that Merrill is shutting down their Rep-as-PM program, considering that is one of the fasting growing industry segments, among other reasons.

    With the properly architected platform (i.e. FDx SingleSight by FolioDynamix as a shameless plug), one can run all fee & commission based programs in a single platform with a click of a button. There is no reason to have to shutdown or refrain from launching a program because of a worry of consolidation. UMH with ALL investment programs should be at every firm’s core.



The Wealth Tech Today blog is published by Craig Iskowitz, founder and CEO of Ezra Group, a boutique consulting firm that caters to banks, broker-dealers, RIA’s, asset managers and the leading vendors in the surrounding #fintech space. He can be reached at