Merrill Lynch And HSBC Finally Roll Out On-Line Wealth Management Service

by Justin Gorringe, Tax-News.com, London

08 May 2001

Merrill Lynch HSBC, the world-wide on-line integrated investment and banking portal, which was announced last year with much fanfare, is finally due to go live this week, although initially it will be available only to residents of the UK, Canada and Australia. And the entry level for the 'mass affluent' has been slashed from $100,000 to only $15,000, no doubt in response to the slew of on-line wealth management services that have been launched in the year since the original announcement. The companies say they have committed $1bn to their joint venture.

The main offering from the www.mlhsbc.com site will be an integrated online investment and banking service allowing people to buy and sell UK and US shares, hold cash accounts in different currencies and borrow against their portfolio. It has the option of a debit card and cheque book, and clients will be able to keep other money in a high interest instant access savings account.

It's estimated that there are 4.5m people in the UK with £50,000 of free investible assets, and almost everybody over say 30 can find £10,000, so what this launch really does is to show that the ease and cheapness of service provision over the Internet will lead to universal 'supermarket' on-line wealth management. It's difficult to see how premium services can be reserved to richer people when they cost nothing to deliver: it's only through the provision of personal services that wealth management products can be differentiated, which means meeting your banker over coffee in his comfortable office, in the time-honoured style. That costs, which means it will always be reserved for the truly rich.

The companies intend to roll out the service to other countries later this year, including Germany, Hong Kong and Japan, with other parts of the world to follow.

"We couldn't be more excited to be working together," said David H. Komansky, Chairman and Chief Executive of Merrill Lynch, and Sir John Bond, HSBC Group Chairman, when the service was announced. "This revolutionary new online business combines the strengths of our firms -- financial expertise, innovative products and services, research content, technology platforms, geographic reach and strong brands -- to create the model for client service in the 21st century. By combining resources, our two companies are able to serve customers in more markets, more quickly and more effectively than either one could on its own."

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