Merrill Lynch

Merrill Lynch: Overview, History, and Recent Changes

What is Merrill Lynch?

Merrill Lynch—now commonly known as “Merrill”—is the wealth management division of Bank of America. Founded in 1914 by Charles E. Merrill, it grew into one of Wall Street’s most recognizable firms, offering retail brokerage, investment banking, asset management, prime brokerage, and commodities trading. Today Merrill is headquartered at 250 Vesey Street in Manhattan and manages trillions in client assets.

Historical highlights

• Founded in 1914 by Charles E. Merrill.
• Expanded through acquisitions and diversification into retail brokerage, investment banking, and fixed-income products.
• Completed an initial public offering in June 1971 and began trading on the New York Stock Exchange.
• In the 2000s, Merrill expanded into mortgage-related businesses, including the acquisition of subprime lender First Franklin Financial in 2006 and heavy involvement in mortgage-backed collateralized debt obligations (CDOs).

Role in the 2007–2008 financial crisis and acquisition

Merrill Lynch suffered severe losses during the 2007–2008 financial crisis due to exposure to subprime mortgages and related derivative products. After announcing large writedowns and selling assets to shore up capital, the firm faced intense solvency concerns. In September 2008, Bank of America agreed to acquire Merrill in an all-stock transaction valued at roughly $50 billion, integrating Merrill’s wealth and advisory businesses into Bank of America’s operations.

Post-acquisition focus and scale

Under Bank of America, the Merrill brand was refocused primarily on wealth management and financial advisory services. The platform serves millions of households, employs tens of thousands of financial advisors, and oversees assets under management measured in the trillions.

Digitalization and changes to advisor compensation

As the wealth industry has digitized, Merrill has adjusted its business model:
* Emphasis on larger client relationships and scalability through digital channels.
* In 2021, Merrill announced changes reducing or eliminating payouts for advisor production credits generated by households with less than $250,000 in assets—encouraging advisors to serve larger accounts while smaller accounts are directed toward robo-advisors or self-directed platforms.
* These shifts reflect broader industry trends toward automation, lower-cost digital solutions, and concentration of human advisory efforts on higher-net-worth clients.

Key takeaways

• Merrill Lynch evolved from an independent Wall Street firm into Bank of America’s wealth-management arm following the 2008 crisis.
• Its expansion into mortgage-backed securities and CDOs contributed to its crisis-era losses and subsequent sale.
• Today, Merrill focuses on large-scale wealth management and is adapting compensation and service models to reflect digitalization and a shift toward automated advice for smaller accounts.

Current positioning

Merrill remains a major player in U.S. wealth management, leveraging Bank of America’s distribution and technology while adapting to industry trends that prioritize digital platforms and scalable advisory models.