Data & Research April 16, 2010

Employees Identify Potential Retirement Plan Improvements

A survey from ING U.S. Retirement Services shows that those in a workplace plan are more confident, informed, and proactive when it comes to their savings.
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More than eight out of 10 respondents (84%) who had a workplace plan said they take an active role in managing their retirement savings and investments, compared to only about half (53%) without any type of retirement savings vehicle.   

However, according to the survey results, respondents identified a number of ways employers could be more proactive in facilitating and stimulating employee savings, including:

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  • offering a diversity of investment options within their plans (88%);
  • making employees aware of what their current accumulated savings account balance would be if converted into a monthly income stream upon retirement (84%);
  • providing more education and tools to help employees better understand how to save (83%);
  • offering a workplace retirement plan, regardless of the employer’s size (76%); and
  • incorporating plan strategies to make saving easier and more automatic for employees (75%).

According to the findings, a majority of Americans believe the private retirement savings system is not at all broken. In addition, nearly three-quarters of those polled (74%) agreed—and almost half (49%) strongly so—that saving for retirement was an individual’s responsibility and not the government’s job. 

The ING Survey, “Beyond the Politics and Pundits: What Americans Think about the Private Retirement System,” was conducted by Ipsos Public Affairs from March 18 to 22, polling 1,000 adult men and women nationwide.

In Practice April 16, 2010

Merrill Profits Fall as Assets Shift to BofA Retail Division

Although Merrill Lynch saw sinking revenue and profits, the brokerage unit is helping to keep Bank of America (BofA) in the black. 
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In its quarterly earnings statement released today, Bank of America reported a first-quarter profit net income of $3.2 billion, compared with a net loss of $194 million in the fourth quarter and net income of $4.2 billion in 2009. Increased retail sales and trading activity from Merrill Lynch Global Wealth Management, as well as improved credit quality, helped drive profits.

Total revenue at Merrill Lynch Global Wealth Management declined $202 million to $3.1 billion from a year earlier, mainly due to the impact of certain deposits and loan balances migrating to BofA’s Deposits and Home Loans and Insurance businesses. BofA said the impact of the transfers were partially offset by improvements in investment and brokerage income due to increased transactions and success in the equity markets. Nonetheless, Q1 profits for the brokerage giant were down 19% from a year earlier, to $360 million, Reuters reported.

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Meanwhile, Merrill was able to retain advisers in the first quarter. The second-largest brokerage firm held steady with 15,005 financial advisers, though the number was 15,822 in the first quarter of 2009. Merrill’s revenue per adviser was down slightly to $807,000 from $830,000 in the fourth quarter of 2009. (Rivals Morgan Stanley Smith Barney and Wells Fargo have not yet released their quarterly reports.)

BofA highlighted an increase in cross-selling between its commercial division and Merrill Lynch Global Wealth Management. Consumer referral and sales to wealth management clients accelerated in the first quarter, as approximately 60,000 lending and deposit products were sold to Merrill Lynch clients. Furthermore, referrals between Global Wealth and Investment Management and the company’s commercial and corporate businesses increased 56% compared with the fourth quarter of 2009.

Average retail deposits in the first quarter increased 2%, or $15.2 billion, from a year earlier, paced by growth from Merrill “as momentum in the affluent customer base continued,” the bank said.

Global Wealth and Investment Management, which houses wealth management and the Retirement and Philanthropic Services business, saw a net income of $497 million, driven mainly by higher investment and brokerage activity, according to BofA. Net revenue increased to $4.4 billion.

U.S. Trust, Bank of America Private Wealth Management saw stayed flat with a net revenue of $688 million.

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