BofA Merrill Lynch Adds to Advisor Alliance

This year, the company intends to add or expand partnerships with as many as six alliance partners, according to a company spokesman. This month, the company has expanded its relationships with John Hancock and The Hartford to include defined benefit plans for small business clients and prospects with up to $5 million in plan assets. That expansion is a direct result of talking to financial advisers who have said they need more services for small-business owners, Rich Linton, head of business retirement solutions for Bank of America Merrill Lynch, told PLANADVISER.

Great-West Retirement Services will be added next month, bringing the number of Advisor Alliance partners to 13:

1. ADP
2. American Funds
3. Ascensus
4. Great-West Retirement Services
5. John Hancock
6. The Hartford
7. Lincoln
8. Newport Group
9. Oppenheimer Funds
10. Paychex
11. Pioneer Investments
12. Principal
13. Transamerica

These providers are mostly offering 401(k) products, with very limited nonqualified offerings, and one provider (Lincoln) offering 403(b) plan recordkeeping, Linton said; the company is looking at the potential for other 403(b) service providers, he noted.

The company also has 30 third-party administrators (TPAs) that it works with around the country, and through a program called InvestmentLink, Linton explained that advisers are able to offer investment and participant services to plan sponsors that have an existing relationship with a TPA in an unbundled service offering.

In June 2010 the company enhanced and renamed the program, formerly MLConnect (see “BofA Merrill Revitalizes Recordkeeping Platform”). In addition to adding new tools including an investment review and retirement plan adviser services tool, Linton said the company also added 17 internal employees, called employer plan associates, to help advisers expand their retirement plan practices. Linton said BofA Merrill Lynch has been very pleased with the growth that has happened since the company’s “reinvestment” in Advisor Alliance.

More than 2,000 Merrill Lynch advisers delivered at least one new Advisor Alliance solution to a small business owner client in 2010, an increase over the 1,750 advisers that did the same in 2009. As of the start of this year, the program reached a record $26 billion in assets, up from $22 billion at the end of 2009, and $17 billion at the end of 2008. Further, it ended 2010 with new plan sales of $3.1 billion in assets, an uptick of 25% year-over-year from 2009, and January 2011’s sales of $700 million is a 63% increase over sales for January 2010. BofA Merrill Lynch expects another strong year of growth in the program this year, saying it has the potential to reach a milestone of serving one million plan participants and more than 40,000 businesses.

According to Linton, further enhancements will be made this year, as the company “continues to be committed to providing solutions to small-business owners.”