September 20, 2012 / 8:58 PM / 6 years ago

Merrill Lynch raising minimum fee on equity trades for clients

(Reuters) - Bank of America Corp.’s (BAC.N) Merrill Lynch Wealth Management is raising the minimum fee it charges retail clients for equity trades, to $75 from $50, an increase the company says will put it more in line with rates charged by its peers.

A logo of Merrill Lynch is pictured at a branch in Zurich August 12, 2012. REUTERS/Michael Buholzer

Several Merrill brokers told Reuters they were informed of the change, which takes effect November 1, in an internal memo sent on Thursday.

Merrill Lynch spokeswoman Susan McCabe confirmed the change, adding that the price increase will not affect how the company’s 16,000 advisers are compensated. The price increase will affect clients in the Merrill Lynch brokerage business and in Merrill’s Private Banking and Investment Group, but not clients in the company’s U.S. Trust division.

Representatives from the nation’s other biggest brokerage firms, Morgan Stanley Smith Barney, UBS Wealth Management Americas and Wells Fargo Advisors, could not immediately be reached for comment about their minimum equity fees.

Thursday’s memo also said the firm would implement a modest increase in its equity commission schedule, but McCabe declined to provide details.

The minimum fee applies to straight transactions, such as when clients call their brokers and ask them to buy 500 shares. More involved transactions, such as when advice is involved, typically come with additional fees.

McCabe, who said the last time Merrill increased its equity pricing fee was in 2003, declined to disclose what percent of Merrill’s business would be affected by the change, but said it represents a small number of trades for the firm.

Merrill advisers who spoke to Reuters said the change will not affect many of their clients since most do simple trades with a discount broker and not with a Merrill adviser.

The $75 fee, like the current $50 fee, will apply only to trades in which the principal value of the stock is $300 or more, McCabe said. Smaller trades will continue to cost no more than 25 percent of the minimum principal value. For example, a client who buys $100 in stock is charged $25.

Additional reporting by Ashley Lau; Editing by Dan Grebler; Twitter @jenhoytcummings

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