What does the Bank of America purchase of Merrill Lynch mean for the little guy?

September 15, 2008 4:50 PM

We have a Capital Builder Account with Merrill Lynch and several shares of BoA. What does the recent purchase of Merrill by BOA mean for us?

I know the short answer is "No one can predict the future and things will revert to the mean....or not" but can anyone predict anything else? Does ML get fully absorbed by BOA, and our dealings with them transferred into whatever comparable arrangement BOA offers its customers? Or does ML stay a separate firm that could go under? Should we be disengaging from ML now, or resting easy? Should we have earlier when they were looking to be in trouble? Should the value of BOA go up, down, hold steady, or change with that side of their newly increased business?

(The other half of this we that handles the finances is away and not to be bothered unless absolutely necessary.)

posted by Martin E. to Work & Money (5 answers total)

Per the NY Times:

Merrill’s brokers would be combined with Bank of America’s smaller group of wealth advisers into an entity called Merrill Lynch Wealth Management, these people said. Customers with brokerage accounts at Merrill are unlikely to be financially affected.

posted by smackfu at 5:19 PM on September 15, 2008

From talking with my ML broker today, nothing much will change for you, except maybe less ATM fees since there are so many BofA ATMs.
posted by charlesv at 6:07 PM on September 15, 2008

Well, for one thing, your BoA stock is now worth about 75-80% of what it was yesterday. Hopefully BoA made the right decision, and in the long run will increase their value. If you got them with the short term in mind, now is a good time to do some research on the optimal strategy for dumping them.
posted by gauchodaspampas at 7:11 PM on September 15, 2008

On today's Marketplace:

[BoA's purchase of Merrill Lynch will] take a while for it to go through. So, until then, like always, you're a Merrill customer, you'll do business as usual. Eventually, your statements will start coming from Bank of America as the takeover continues. On the upside, you will now be with a gigantic bank, with lots of money backing up your money. Your broker, though, may or may not keep his job. But basically, not much else changes for you.

Doesn't address owning BAC specifically, but that's the general answer for Merrill Lynch customers.
posted by DevilsAdvocate at 7:46 PM on September 15, 2008

Merrill as a broker will pretty much remain as it is. Your investments will not be affected, except to the extent that they include ML mutual funds that include investments in ML products. Those products will probably be converted to BofA products.

Gaucho has a good point, but does not mention that BofA also bought Countrywide a short time ago. These two acquisitions, taken together, are pretty audacious. They may flop or they may succeed. Do you feel lucky?

(Unless your BoA shares are a large part of your total assets, it may be worth the ride.)
posted by yclipse at 7:48 PM on September 15, 2008