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Rating:Merrill Working on MDA Not Rated 3.0 Email Routing List Email & Route  Print Print
Thursday, January 24, 2002

Merrill Working on MDA

Reported by Sean Hanna, Editor in Chief

Merrill Lynch is working on a new multiple discipline account product for distribution through its advisor force, according to industry sources. The move would be a response to the successful launch of a similar product by Citicorp's Salomon Smith Barney brokerage unit.

A spokesperson for Merrill did not comment in queries about the new product.

Multiple discipline accounts are a form of managed account product designed for small accounts. Typically, they are offered to clients with accounts of no more than $125,000. Unlike other managed accounts, these rely on a limited number of managers for the assets. Typically, there are only three managers.

These accounts could have the impact of moving clients out of funds and into managed assets, in which the clients directly own the stocks of the underlying portfolio.

"For the lower end of the market it is probably an ideal product," says Keven Fee, a consultant at Financial Research Corporation specializing in managed accounts. He adds that the MDA concept makes the managed account concept more palatable to smaller account holders. Unfortunately for fund firms, these clients now typically rely on registered funds for managed asset products.

Fee added that it is likely that all of the major wire houses will follow the lead set by Salomon and create some form of MDA.  

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